Otokar (OTKAR TI) - Transition underway: Initiating at Buy
We are initiating coverage of Otokar with a BUY recommendation and a 12-month target price of TRY115.2, implying an upside of 34.7% from the stock’s current price.
Following the solid know-how accumulation in the last ten years, Otokar has significantly expanded its defence portfolio and is now in a prime position to utilize its established international sales network to become a true contender in the global armoured vehicle market. In our view, Otokar offers a prominent transition story as its cash generation capability is strengthened by international defence and commercial orders.
Furthermore, the USD661m worth of deliveries to the UAE, that we expect commenced in 4Q18, will serve as a major boost for the company’s financials until 2023 and offset a particularly rough 9M18, resulting in an unexpectedly decent FY18.
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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