Otokar (OTKAR TI) - The best is yet to come: Maintain Buy
We raise our 12M TP by 18% to TRY143.6 on higher defence segment revenues for 2020 and 2021 while slightly adjusting our 2019E NI. We think that Otokar offers a prominent transition story as its cash generation capability is strengthened by international defence and commercial orders.
Utilizing the know-how accumulated over the last ten years, Otokar has significantly expanded its defence vehicle portfolio and is now in a prime position to enter the global armored vehicle market. Since its product mix shifts towards to the defence segment, we expect cash generation to remain strong for the foreseeable future. Meanwhile, its export dominated commercial segment revenues should be also supportive in the midst of weakening domestic demand, in our view
Otokar Otomotive Ve Savunma Sanavi is engaged in the import, manufacture, assembly, sale and export of bodies, engines, and all other components of all kinds of land, sea and air defense vehicles, as well as security vehicles, commercial buses, trucks, minibuses, midibuses, panel vans, cross-country vehicles, etc. Co.'s primary focus is on the production of Land Rover 4x4 and minibuses.
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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