MLP Care (MPARK TI) - Fairly priced for now: Downgrading to Hold
MLP Care’s 4Q18 net income came in at TRY30m, below both our estimate of TRY62m and the RT consensus of TRY55m. The earnings miss was mostly due to higher-than-expected OPEX, lower FX gains, and an unexpected tax expense. On the bright side, FCF returned to positive once again after dipping into negative territory in 3Q18, which was previously a source of concern. The marked q-q improvement in FCF generation was mainly due to better NWC management as receivable days dropped.
We believe that despite the probability of acquisitions as consolidation in the healthcare market continues, the lack of significant foreseeable growth prospects and the prevailing currency volatility limit the stock’s upside potential. We downgrade our recommendation on MPARK to HOLD from Buy.
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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