Anadolu Cam - Recent Sluggishness Unjustifiable Given Bright Operating Outlook
We raise our earnings forecasts for Anadolu Cam following price hikes introduced in 1H17 and in light of a recently announced investment, which will expand its domestic capacity by 15% by 2H18. Our new EBITDA estimates are 23% and 19% above our previous forecasts for 2018 and 2019, respectively, implying corresponding EV/EBITDA ratios of 6.3 and 5.6 and an average discount of 23% to international peers. Our new target price of TRY2.88 offers 32% upside, so we upgrade the stock from HOLD to BUY. In addition, the stock has underperformed slightly over the past three months, rendering current levels attractive, in our view.Anadolu Cam Sanayii AS (Anadolu Cam) is the glass packaging Company of Sisecam Group, based in Turkey. It manufactures and markets glass packages in various volume and colors for different industries. These are food, water, mineral water, milk, beer, wine and beverages including high alcohol ones as well as pharmaceuticals and cosmetics sectors. The product portfolio includes green, amber and forehearth-colored containers ranging from six to 8,000 cubic centimeters. Production is carried out in four countries, with a total of 10 production facilities, three of which are located in Istanbul, Mersin and Yenisehir, Turkey, whereas the foreign production facilities are located in Russia, Ukraine and Georgia.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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