Polytec confirmed at BUY, TP EUR 7.5 - Recovery delayed (again)
Having drastically cut our forecasts we reduce the target price for Polytec to EUR 7.5 from EUR 10.5 while maintaining the BUY ratingSustained semiconductor shortages, cost pressure, production disruptions of wire harnesses as well as renewed lockdowns in China magnifying further concerns about bottlenecks in the automotive supply chains shape an adverse market outlook
Admittedly silver linings are hard to identify in the short run, but it appears to us that, due to the aforementioned factors, sentiment on Polytec might be at a trough and the shares are priced for sustained value destruction
The stock is currently trading at roughly half of its book value, which, leaving the peak of the coronavirus crisis aside, is below the stocks forward multiple low of approx. 0.6x over the last decade. Over the period FY 12-21 Polytec earned median EPS of exactly EUR 1.00. Our target price thus implies a P/E multiple of 7.5x on that mid-cycle EPS
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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