Polytec confirmed at BUY, TP EUR 10.5 - Estimates and target price cuts on the back of profit warning
Triggered by the sustained short-term cancellations of call-offs by its OEM customers, Polytec issued another profit warningApart from the revenue shortfall, the lack of visibility and very short-term driven notification is also detrimental to Polytecs ability to adjust its cost base more efficiently
Given recent sector newsflow Polytecs guidance cut arguably did not come out of the blue. We have been below the prior guidance but had to cut estimates further (mostly for FY 21)
While the stock might be rather range-bound until tangible evidence for an improvement of the situation emerges, we still see value in Polytec. We have lowered the TP to EUR 10.5 (EUR 12.5) while maintaining the BUY rating
Polytec is a globally operating corporation, based in Austria, focusing on the automotive and plastics industries. Co. is engaged in the development and manufacturing of high-quality plastic parts. In the automotive industry, Co. works as supplier of exterior and engine compartment components in the high-volume market segment as well as a supplier of original equipment and components for small and medium series. Co. is active as a full-service provider in the area of injection molding, as a specialist in fiber-reinforced plastic components, as a manufacturer of original accessory parts made from plastic and as a developer of tailor-made industrial solutions made of polyurethane.
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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