Mytilineos: firing up the engines (stays BUY)
In this report, we have recalibrated our estimates for 2023-25E and raise our 12M price target (PT) to EUR 32.2/share (+29% upside potential), reiterating our BUY rating on Mytilineos. Since our previous update, in December 2022, the stock is up c.40%, but we still believe that there is room for a further upgrade, on the back of a stronger earnings outlook. In 2022, the company outdid all expectations, setting a solid foundation for this year, targeting EUR 1.0bn in EBITDA. That said, we anticipate 2023E to be another record year for Mytilineos, on the back of:1) the robust LME environment in the metallurgy division; 2) the doubling of capacity in thermal energy generation; and 3) noteworthy growth in RES projects in both its own portfolio and BOT projects. We see a significant uplift vs. our previous forecasts, and now expect EBITDA growth of 12% and 9% in 2023E and 2024E, respectively, a strong balance sheet, and a decent dividend yield, despite the aggressive capex plans. On our numbers, the stock trades at 6.8x P/E and 4.8x EV/EBITDA for 2023E. We remain BUYers.Mytilineos Holdings is an industrial group engaged in the sectors of Metallurgy, EPC, Energy, and Defence. Co. and its subsidiaries are engaged in three main operating business segments: Metallurgy, Constructions and Energy. Co. and its subsidiaries monitor its performance on Metallurgy and Mining Sector through the subsidiaries Aluminium S.A. (Alumina-Aluminium) and Sometra S.A. (Zinc-Lead). Co., through its subsidiary, METKA S.A., is an EPC Constructor in Greece.
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.
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