Orange Polska: high quality name, but fairly valued (downgraded to HOLD)
We have downgraded our rating on Orange Polska (OPL) to HOLD, from Buy, and raised our 12-month price target (PT) from PLN 7.81 to PLN 9.43/share, implying 11% upside potential. We appreciate OPL, due to its solid growth outlook (a 2020-23E EBITDAaL CAGR of 4.4%), the resumption of dividend payouts (4-5% dividend yields in 2022-23E), and a potential trigger in the form of mobile network monetisation. Moreover, we see the Polish mobile market as healthy, with further average ARPU growth potential, while Orange is, currently, the only name listed in Poland offering pure exposure to the Polish telecoms market. However, we believe that OPL is close to its fair value currently, and we do not see much upside left, on a 12M perspective – on our forecasts, OPL trades at 2022-23E EV/EBITDAs of 5.2-4.9x, 2-5% discounts vs. its peers (vs. the 2Y average discount of 1%). We would, however, take advantage of any price correction.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.
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