OPAP: Winner of the Derby (stays BUY)

In this report, we reiterate our BUY recommendation on OPAP, setting a higher 12M price target (PT) of EUR 13.2/share, with an appealing 38% of upside potential. We have adjusted our earnings forecasts, considering the 4% reduction in corporate income tax, as well as the upcoming of Stoiximan acquisition, which contributes a double-digit EURm to our 2020E EBITDA forecasts. We have also fine-tuned our dividend payout estimates based on the bulk of the free cash flow, in an effort to crystalise the dividend returns to shareholders, revealing quite an appealing dividend yield of 8.7-10.8% for 2019-21E. On the earnings side, we pencil in a notable pick-up of 17% in gross gaming revenues (GGR) growth for 2020E, derived primarily by the VLTs rollout and the potential full consolidation of Stoiximan, which translate into three-year EPS growth of 15.3% for 2019-21E. All-in-all, we are firm believers that OPAP is the winning horse in the Greek universe dividend race, delivering continuous GGR growth, coupled with a solid balance sheet and strong free cash flow generation, justifying a 2019E P/E of 16.7x and EV/EBITDA of 8.7x.