Orange Polska: bottom fishing (upgraded to BUY)
We have upgraded our rating on Orange Polska (OPL) to BUY, from Hold, and cut our 12-month price target (PT) to PLN 8.00/share from PLN 9.43, implying 42% upside potential. After a 26% decline in the share price in the LTM, we believe that most of the risks (inflation, competition risk, pricey 5G auction) are already priced in, and that this might be a good time to start bottom fishing. We like OPL for its decent growth outlook (2021-24E EBITDAaL CAGR of 3.4%), solid FCF (13-11% 2022-23E FCF yield) and low leverage (2022E ND/EBITDAaL of 1.1x), leaving a lot of room for dividend expansion. We expect OPL to offer a 6-8% DY in 2022-23E. Moreover, we believe the Polish mobile market is relatively healthy, with further ARPU growth potential, considering that Poland is one of the cheapest countries in Europe, and telcos are striving to offset the inflationary pressure. Mobile network monetisation remains a strong positive trigger for the story, we believe. OPL trades at EV/EBITDAs of 3.7x for 2022-23E, 26-27% discounts vs. its peers (and the 2Y average discount of 14%).Orange Polska SA is a supplier of telecommunications services in Poland. Co. provides services, including fixed-line telecommunication services, Integrated Services Digital Network, voice mail, dial-up and fixed access to the Internet and Voice over Internet Protocol. Co. is one of Poland's three DCS 1800 and GSM 900 mobile telecommunications providers. Co. provides also third generation UMTS services. In addition, Co. provides leased lines, radio-communications and other telecommunications value added services, sells telecommunications equipment, produces electronic phone cards and provides data transmission, telephone directories, multimedia services and various Internet services.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.