Fourlis: Are we there yet? (stays HOLD)
We have updated our estimates to account for the COVID-19 impact on Fourlis’ profitability, while assessing the company’s dynamics, amidst a changing retail environment. We believe that Fourlis is well-positioned to capture market share in the online environment; we understand, however, that omnichannel retail is not enough to move the needle, as the limited size of the Greek home furnishings market is unable to unlock the operating leverage of IKEA’s business model. We have revised our estimates and account for: 1) revenues 17.7% yoy lower this year and a recovery of 13.5% yoy in 2021E; and 2) an updated network rollout for both Intersport and IKEA, with the latter launching the new smaller-concept stores. We have also changed our valuation method, which is now based 100% on DCF vs. 80% DCF/20% target EV/EBITDA previously, as we see DCF as a more accurate valuation method for Fourlis. We derive a 12M price target (PT) of EUR 4.29/share, yielding 15% upside potential, so we maintain our HOLD recommendation. On our numbers, the stock trades at a 2021E P/E of 31.5x and 7.4x EV/EBITDA (non IFRS 16 adjusted).Co. is engaged in the manufacture, import and distribution of electrical household appliances and the manufacture of FOURLIS kitchen hoods. In addition, through a subsidiary, Co. is engaged in the operation of a retail chain.
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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