Piraeus Port Authority: full steam ahead (upgraded to BUY)
We have revisited our investment case for Piraeus Port Authority (PPA), and we have upgraded the stock to BUY (from Hold), with a new 12M price target (PT) of EUR 22.8/share, offering attractive 28% upside. Despite the pandemic-related headwinds, triggered by poor consumer sentiment and global supply chain disruptions, PPA combines solid profitability with a strong balance sheet, dividend distributions and incremental growth from the masterplan, in our view. We have updated our forecasts and account for a gradual recovery in the cruising business from 2022E-onwards, as well as a pick-up in container and coastal services. The port’s recurring profitability and cash position are strong enough to cover the financing needs of the masterplan’s mandatory investments, with net debt/EBITDA of -0.1x in 2022E. On our numbers, the stock trades at 10.0x P/E and 5.4x EV/EBITDA in 2023E, well below the 1YF historic average on both. We believe that the current stock price does not fully reflect either PPA’s current position, nor the incremental value addition from the investment plan; hence, we have upgraded the stock to BUY.Piraeus Port Authority SA is a Greece-based company engaged in the management and operation of Piraeus port. The main activities of Piraeus Port Authority SA are ships' anchoring services, handling cargo, loading and unloading services as well as goods storage and car transportation. The Company is also responsible for the maintenance of port facilities, the supply of port services (water, electric current and telephone connection, among others), for services provided to travelers and for renting space to third parties. Piraeus Port Authority SA has two wholly owned subsidiaries, Nafsolp SA and Logistics OLP SA. Nafsolp SA is mainly engaged in ship repairing services and Logistics OLP SA is mainly engaged in the development of combined transportations as well as port facilities and 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.
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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.
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