Titan Cement: recovering lost ground (stays BUY)
The global spike in input costs has penalised Titan Cement over the past few quarters, as strong growth in volumes did not translate into increasing EBITDA. However, price increases across the board are already leading to a margin recovery, bringing solid relief in operating profitability. We believe that this improvement could lead to relief in the share price. The stock is trading currently at our EV/EBITDA of 5.6x for 2022E vs. its 15-year average of 8.5x, a large c.50% discount to its US peers (which account for c.50% of Titan’s EBITDA) and close to its non-US peers (EV/EBITDA ranging at 5-6x). We retain our BUY rating on the stock, but lower our price target (PT) to EUR 15/share, from EUR 22/share.Titan Cement Co. and, its subsidiaries (collectively, the Group) are engaged in the production, trade and distribution of a range of construction materials, including cement, concrete, aggregates, cement blocks, dry mortars and fly ash. The Group operates primarily in Greece, the Balkans, Egypt, Turkey and the U.S. The Group operates in 14 countries in Europe, North America and the Eastern Mediterranean and is organized in the following four operating (geographic) segments: Greece and Western Europe, North America, South East Europe, and Eastern Mediterranean.
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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