Fourlis: For a few dollars more (BUY - transfer of coverage)
We transfer coverage of Fourlis, retaining our BUY recommendation, but cutting our price target (PT) to EUR 6.17/share, offering 31% upside potential, reflecting rather muted furniture growth for IKEA currently and a slower store rollout for the Intersport business. Fourlis saw a good year in 2018, in our view, and we also anticipate a positive outlook for 2019-20E, but without any short-term catalyst that could reveal the group’s operating leverage. In the home furnishing market, we take into account some slight indications of improvement in retail trade, although Fourlis’ home furniture segment fails to inspire confidence in a strong pick-up in the near term, in our view. That said, we forecast a 5.3% EBITDA CAGR for 2018-21E, with an EPS CAGR of 11%. Our estimates denote dividend yields of 3.3% for 2019E and 3.7% in 2020E. The stock is also trading currently at 6.9x 2019E EBITDA, implying a 31% discount to its five-year historical average. We retain the view that Fourlis is a valuation call and believe, therefore, that the 16% price drop provides a good entry point.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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