voestalpine confirmed at BUY, TP EUR 33 - Russian gas dependency and macro woes well discounted
We have raised FY 22/23e EBITDA to EUR 2.1 bn, largely in line with the guidance of approx. EUR 2 bnReflecting the more challenging macro environment and a more cautious outlook for certain end-markets we have cut the forecasts for the next two years to EUR 1.65 bn and EUR 1.71 bn, respectively
We are of the opinion that the expected profit generation would still warrant a higher share price and attribute the deviation foremost to the uncertainty about the sustainability of Russian gas supply. This topic could loom over the investment case for some time and we acknowledge that an actual cessation of gas deliveries would entail further downside
Despite low visibility and slowing economic growth on both sides of the Atlantic, we think that trading at a P/B multiple of 0.5x, just slightly above the historical trough from spring 2020, there is too much value in voestalpine to ignore
Despite the prevailing woes and a target price reduction to EUR 33 from EUR 41, we maintain the BUY rating
voestalpine is engaged in the production, processing, and distribution of materials made of steel and in research and development in the areas of metallurgy, metal processing, and materials technology. Co.'s steel division focuses on the production and processing of flat steel products. Co.'s special steel division is involve in tool steel and high-speed steel. Co.'s metal engineering division is engaged in turnout technology, rails and treated wire, and tubes. Co.'s metal forming division is involve in tube products and precision strip steel as well as pre-finished system components. Co.'s other activities include heavy plate production, a foundry, and a number of downstream processes.
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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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