Vestel Elektronik (VESTL TI) - Better 4Q, improving 2019 outlook: Maintain Buy
We reiterate BUY on VESTL and VESBE on the back of declining raw material prices, Vestel’s increasing market share in Europe and their compelling valuations. We revise our estimates significantly for both companies on expectations of lower raw material prices and hence better margins, and improving outlook of consumer electronic division. Our revised DCF-based TPs of TRY10 and TRY18.7 for VESTL and VESBE offer 32% and 11% upside.
Compared to international peer average, VESTL trades at 49% discount with its 2019E EV/EBITDA of 3.9x and 49% discount with 2019 P/E of 6.9x. VESBE trades at 52% discount with its 2019E EV/EBITDA of 3.6x and 58% discount with 2019 P/E of 5.6x.
Vestel Elektronik Sanayi ve Ticaret is a consumer electronics, white goods, and digital products company based in Turkey. Co. is engaged in producing electronic instruments, devices, equipments, spare parts, tools, components, videos and colour televisions throughout Turkey and Europe. Co. operates within three divisions: television production; refrigerator, air conditioning units, washing machines and cookers; and digital devices. Co.'s production facilities are located in Manisa industrial site (Aegean Region, Turkey), Vladimir Region, Russia and Izmir Aegean free zone industrial site.
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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