Semperit confirmed at BUY, TP EUR 42 - There is more cash to be pocketed beyond the peak year
We found Semperits Q2 results accommodative for our BUY rating and raise the target price to EUR 42 from EUR 40.The demand recovery in the industrial divisions is ongoing with order books indicated significantly higher.
As regards Sempermed, the quarterly profit climax was arguably achieved in Q2. But this does not mean the story is over. We think that the market is overly cautious about Sempermeds profit generation in the expected deflationary environment and under-appreciates the FCF potential.
The group is very explicit that the expansion of its industrial business is paramount in the capital allocation. Given that the dividend payout is conditional to the financial power needed in M&A, we assert a blurred visibility
Semperit is a holding company, engaged in developing, producing and selling specialized rubber and plastic products for the medical and industrial sectors. Co. has 20 production facilities in 12 countries. In addition, Co. operates a distribution network with branches in Asia, Europe and North and South America. Co.'s products are sold to providers in the medical and industrial sectors, who are supplied with specialised rubber and plastic products. Co.'s main product categories include examination and surgical gloves, hydraulic and industrial hoses, conveyor belts, escalator handrails, construction profiles, cable car rings, ski foils and products for railway superstructures.
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