PORR raised to BUY, TP EUR 16 - Clearing the hurdles - Vol. II
We upgrade PORR to BUY from HOLD with a new a target price of EUR 16 (vs. EUR 17.5 before)In our Company Update from December 2020 we pointed out three hurdles that needed to be cleared for PORR shares to re-rate. These comprised 1) a higher equity ratio, 2) clarity on the Austrian cartel case and 3) the establishment of a track record after a weak financial performance in recent years
We we believe that hurdles #1 and #2 have been cleared, #1 at least to a satisfying extent given the recent capital increase
Hurdle #3, i.e. delivering profit growth that would warrant confidence as regards the 3% EBT/output target by FY 25 certainly needs more credibility in the coming quarters, but we identify some encouraging signs
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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