Purcari Wineries: More wine, please (BUY - transfer of coverage)
We transfer coverage of Purcari Wineries, keeping our BUY recommendation and setting our 12M price target (PT) at RON 18.7, implying 27% upside. Purcari has weathered the health crisis well, saved by the very solid sales performance in Romania, its core market. Going forward, we expect Purcari to continue to grow, but at a more sedate pace compared with previous years, and deliver 2021-25E sales, EBITDA and net income CAGRs of 13%, 14% and 16%, respectively. Compared with its international peers, Purcari trades at a 19% discount on our 2022E P/E of 12.2x and a 17% discount on our 2022E EV/EBITDA of 8.2x. We feel that the discount is not justified, given its higher growth prospects compared to its peers, its low level of indebtedness and its better margins. Our forecasts reflect strictly organic growth, but the company is targeting to expand via M&A as well, which should generate additional upside, in our view.
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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