Ford Otosan (FROTO TI) - Improving prospects for exports: Upgrading to Buy
Ford Otosan’s net income increased by 11% y-y to TRY478m, in line with RT consensus’s TRY482m but slightly below our estimate of TRY517m. Although the operating performance was in line with our estimate, higher-than-expected FX loss was the main reason for the deviation between our estimate and the bottom-line.
We increased our 2019 export estimate from 319K to 346K and reflected new FX assumptions to estimates. We increased our DCF-based TP to TRY69.4 from TRY61. We upgrade FROTO to BUY from Hold due to its attractive valuation and its solid growth outlook with rising exports.
Ford Otomotiv Sanayi is an automobile manufacturing company based in Turkey. Co. operates as a joint venture between Ford Motor Company and the Koc Group of Companies. Co. is engaged in manufacturing, assembling and selling motor vehicles, primarily commercial vehicles, imports and sells passenger cars and manufactures and imports and sells spare parts of those vehicles. Co. has two plants located in Kocaeli and Eskisehir, has a spare part distribution warehouse in Kartal, Istanbul and a branch in Tubitak Marmara Research Centre, Gebze Campus Technological Free Zone (TEKSEB).
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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