Magnit confirmed at BUY, TP USD 13.8 - Healthy story in spite of COVID-19
We are reiterating our BUY recommendation for Magnit while lowering the target price to RUB4,460 for local shares and USD 13.8 for GDRs. We think that negative one-offs that affected Magnits profitability are in the past and anticipate the company to generate an EBITDA margin of above 6% in 2020e onwards. On our estimates, the current approach to dividends implies a close to double-digit dividend yield, but also leads to net debt/EBITDA staying at around 2x till 2022e, despite a lower expansion capex. We see limited impact on Magnits fundamental value from the ongoing COVID-19 crisis.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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