Arcelik (ARCLK TI) - Retrograde outlook for 2H19: Downgrading to Hold
Arcelik posted TRY219m net income in 2Q19, worse than RT consensus’s TRY240m estimate and our TRY250m one. The operating performance was in line with both our and consensus estimates in 2Q19. However, higher-than-expected effective tax rate was the only reason for the bottom-line miss in 2Q19.
ARCLK cut its 2019 revenue and EBITDA guidance. We revised our estimates and cut our TP by 5% to TRY20.50.
We downgrade ARCLK to HOLD, from Buy, due to its unattractive valuation and a weak 2H19 outlook.
Arcelik is engaged in the commercial and industrial activities in respect of the production, sales and marketing, customer services after sales, exportation and importation of consumer durable goods and consumer electronics. Co. has two segments: white goods reportable segment, which comprises washing machines, dryers, dish washers, refrigerators, ovens, cookers and the services provided for these products; and the consumer goods reportable segment, which comprises televisions primarily with flat screens, computers, cash registers, other electronic devices and the services provided to consumers for these products.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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