Oesterreichische Post confirmed at HOLD, TP EUR 33.50 - Not immune to Covid-19 impacts
Although clearly more resilient than other sectors, we highlight the vulnerability of the Oesterreichische Post (Austrian Post) to Covid-19 related impacts especially in direct marketing (approx. 18% of group revenues) and also letter mail (approx. 40% of group revenues). As the cost base is characterised by a high degree of fixed costs, at least in a short-term perspective, negative revenue trends will likely have a high impact on operating profitability. In our view, the relative stability of the share price in the last few weeks does not fully reflect the downside risks. Nevertheless, we reiterate our HOLD recommendation for the share and set a new target price of EUR 33.5 (down from EUR 36) highlighting the relatively more stable business model vs. other sectors.Austrian Post is a logistics and postal services provider in Austria. Its main business activities include the transport and delivery of letters, direct mail items, print media and parcels. Co.'s branch network offers postal, banking and telecommunications products and services to its customers throughout Austria. Co. is also represented by subsidiaries in 12 European markets, particularly in the parcel and logistics segment as well as in unaddressed direct mail items.
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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