Cyfrowy Polsat: costly diversified business (stays HOLD)
We reiterate our HOLD rating on Cyfrowy Polsat (CPS) and cut our price target (PT) to PLN 15.42/share (from PLN 35), implying 10% upside potential from the current share price. Despite the strong share price deterioration (-25% LTM), we are HOLDers of CPS, considering its still uninspiring multiple valuation and upcoming energy-related capex cycle causing high holding structure complexity, high leverage and no dividend payouts until 2026E, on our assumptions, paired with a marginally positive impact on CPS’ fair value (a c.PLN 0.6/share contribution, c.4% of our PT). On the other hand, we believe that further downside is limited, CPS might improve its financial condition through the sale of some non-core assets, while its results momentum should improve from 2H23E. On our forecasts, CPS trades at a 2025E P/E of 10.0x and EV/EBITDA of 6.0x, at a 9% discount and a 2% premium vs. its peers, respectively.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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