Polytec confirmed at BUY, TP EUR 12.5 - Headwinds should mask the potential only temporarily
Polytecs Q2 results fell shy of our expectations and the group lowered its FY 2021 EBIT guidance to around EUR 30 mn from ca. EUR 35 mn. Sharply rising raw material costs, cancellations of call-offs by OEMs and higher staff expenses were the driving forces.The implied sharply improved profitability in H2 appears rather ambitious, in our view, as it hinges on three conditions. We adopt a better-safe-than-sorry stance and have further lowered EBIT by 10% to ~EUR 27 mn.
We remain upbeat on the investment case as the shorter-term headwinds should not burden the business model sustainably. Once the concurrent pressuring issues abate the earnings/margin improvement should be resumed
We maintain the BUY rating with a new TP of EUR 12.5 (EUR 13.5)
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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