Orange Polska: safe dividend haven (stays BUY)
We reiterate our BUY rating on Orange Polska (OPL) and raise our 12-month price target (PT) to PLN 9.91/share, from PLN 8.00, implying 16% upside potential. Considering the solid Polish macro outlook, we prefer cyclical high-beta names, in general, but see OPL as a safe haven in the case of any downturn. It offers an attractive dividend yield (6-8% in 2023-25E) and the only pure exposure to the steadily-growing Polish telecoms market. Moreover, considering the organic growth outlook and the current valuation of both names, we see an opportunity for a pair-trade vs. Cyfrowy Polsat (CPS; HOLD, PT PLN 15.42). On our forecasts, OPL trades at EV/EBITDAs of 4.4x for 2023-24E, 15% discounts vs. its peers, and a 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.
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