TCS - Primed for Another Top Year
After a hugely successful year for the company and the stock, we think the pieces are in place for the good run to continue, and we keep TCS as our top pick heading into 2018. We see regulation as the main risk to the story in the coming months but think the regulator will tread carefully in its PTI initiative. The management's bullish 2018 guidance looks highly feasible, in our view, and we forecast an 18% 2018E-20E EPS CAGR. With ROE likely to top 50% in 2018-19, TCS should be able to maintain its 50% payout ratio with possible special dividends on top. We keep our BUY recommendation on the stock and raise our target price to $24 per GDR.TCS Group Holding is a retail banking services group based in the Russian Federation. Co. is principally engaged in providing retail banking services in the Russian Federation through its subsidiaries, primarily Tinkoff Credit Systems. Co., through this subsidiary, fully licensed by the Central Bank of Russia and a member of the Deposit Insurance System, specializes in credit cards. Co. provides online retail financial services through a branchless operating platform. Co. also offers remote access to its financial products and services through its online banking as well as through mobile banking and high-volume call centers.
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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