Magnit - Revisiting the Case After 3Q17 Results
Magnit's EBITDA margin was down 340 bps y-o-y in 3Q17 on seasonal and structural factors. We believe most of the gross margin compression is here to stay and therefore incorporate it into our forecasts. We assume a medium-term EBITDA margin of 8.5%, rising to 9.0% over the long run. We cut our EBITDA forecasts by 15% on average, which takes our target price down to $37.00 per GDR. We retain our HOLD recommendation.
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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