InPost: reasonably priced alternative (stays BUY)
We maintain our BUY rating for InPost, with a lower price target (PT) of EUR 8.5/share (from EUR 9.0). The company started the year on a high note, delivering 17% yoy volume growth in 1H22, despite a high base. InPost managed to contain its EBITDA margin erosion in the core Polish market to 110bp in 2Q22, from 350bp in 1Q22. Going forward, we expect a gradual repricing of its contracts with its core customers, starting with Allegro (2 November), to provide a safety margin should the market decelerate strongly, which we still have not noted in our channel checks. Despite 12% share price growth (almost 40ppt above the WIG) since we upgraded InPost to BUY in late April, we still find the stock to be cheap at EV/EBITDAs of 10x for 2022E and 8x for 2023E, on our estimates, with double-digit discounts to Allegro and the e-commerce peers’ median, but close to UPS. Given InPost’s growth potential (2021-24E EBITDA CAGR of 29%) and asset-heavy business model (2021 asset turnover of 63%), we believe it should trade in the middle of the range, between the couriers and the e-commerce names. Our new PT offers 40% 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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