OPAP: high dividend on hard currency (stays BUY)

Following the publication of the 4Q21 results, we have updated our model and adjusted our 2022E forecasts, to account for: 1) the COVID-19 restrictions on retail that are still in place; 2) management’s GGR and EBITDA guidance for the year; and 3) a higher inflation outlook, which will weigh on disposable income. Nevertheless, we believe that the GGR will continue to grow, on the back of the partial normalisation vs. the pandemic levels and OPAP’s proven track record of defensive sales performance in times of headwinds. Also, the growth of the online segment continues to drive the company’s top line, with the total online segment contributing more than 23% of the total GGR in 2021. In our view, the company maintains a rock solid balance sheet, with moderate financing needs post 2022E and reduced cash outflows on the GGR contribution, alleviating the free cash flow further, allowing for generous dividend distributions for 2022-24E. On our numbers, the stock trades at a 2022E P/E of 11.8x and an EV/reported EBITDA of 7.3x. We reiterate our BUY recommendation on the stock, with a 12M price target (PT) of EUR 16.7/share and continue to see OPAP as a top pick in our Greek and regional consumers universe.