Polytec raised to BUY, TP EUR 7 - A grim market but a record low P/B is hard to neglect
The coronavirus pandemic has triggered an unprecedented shock to the automotive industry and has sent visibility towards the zero line. Amid rising unemployment rates, muted consumer confidence and repercussions on the (truck) investment cycle, a long and pebbly recovery path has to be assumed, presumably accompanied by a volatile sector news-flow. For Polytec, April and May should be (operating) loss making periods, with June being contingent on the development of call-offs. As the summer months are seasonally weaker (usually lower production at OEMs), a more pronounced pick-up of the groups earnings power might kick in as of mid-3Q only. The industrys hopes are pinned on sales initiatives by OEMs (e.g. VW reportedly offering payment-protection insurance in case buyers lose their jobs) and state-backed stimulus programmes (e.g. scrapping premiums). We are aware that silver linings are scarce at the moment but Polytec has a solid balance sheet to withstand the pressure and due to value considerations we upgrade the stock to BUY from HOLD with a new TP of EUR 7 (EUR 9.5).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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.