PORR confirmed at BUY, TP EUR 17.5 - Model update post Q1: Slightly higher estimates and TP
We maintain the BUY recommendation for PORR amid a target price increase to EUR 17.5 from EUR 16Rebuilding an earnings/profitability track record remains the key driver to unlock value, in our view. Although we think that inroads were made in this respect in the past few quarters, at the same time a further delivery is required to more comprehensively restore credibility
The management acknowledges that rising costs create headwinds. Although we assume that they stand against a faster margin improvement, we think that a margin squeeze can be avoided
We have increased the FY 22-23e top line by 6-8%, EBITDA by 2-3% and pre-tax profit by 7%
PORR is engaged in the building construction, structural and civil engineering, road construction and infrastructure construction. Co. also operates the construction branches of planning, development, execution and operation. Co. also coordinates the supraregional activities of the construction branch subsidiaries. Co. is engaged in the contruction of buildings and industrial plants; revitalizing protected architectural treasures; general contractor services, project planning and development; railway construction; foundation engineering; power-plant, tunnel, underground rail and traffic route construction; environmental engineering and prestressing technology.
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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