InPost: e-commerce growth at courier multiples (upgraded to BUY)
We have upgraded InPost to BUY (from Hold), with our price target (PT) reduced to EUR 9.0/share (from EUR 16.3), as we have raised our risk free rate assumption to 6%, from 3%. We have also cut our 2022E EBITDA forecast by 9%, to reflect the impact of costs inflation (c.60% in labour and energy) on the temporarily sticky prices of InPost’s services (Allegro frozen by November, other key clients by early-2023E). However, beyond this year, we have upped our EBITDA estimates, seeing the company’s costs-efficient solution as a winner within the stagflationary environment. Following the 66% dive from the IPO price, we see the stock as cheap, trading at EV/EBITDAs of 10x for 2022E and 7x for 2023E, on our estimates, not only at double-digit discounts to Allegro and the e-commerce peers’ median, but also in between UPS and FedEx. We believe that, given InPost’s growth potential (2021-24E EBITDA CAGR of 26%) and asset-heavy business model (2021 assets turnover of 63%), it should trade in the middle of the range, between the couriers and the e-commerce names. Our new PT offers a sizable 65% upside potential.
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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