Titan Cement: Too cheap to ignore (upgraded to BUY)
Titan Cement has been one of the worst-performing stocks in the ASE this year (down 43% ytd) and now trades at an EV/EBITDA of 5.9x, on our 2020E, a discount of c.30% vs. its historical averages and c.22% vs. its peer group. In view of the marginal COVID-19 related impact and the strong free cash flow generation, we believe that this persistent share price underperformance has been exaggerated. On the negative side, we highlight that the company has been generating persistently low returns, as nearly half of the asset base is contributing marginal profitability. Thus, a key turning point for a meaningful share price re-rating would be clearer visibility on a recovery in Greece and/or Egypt, in our view. We set our new price target (PT) at EUR 14.0/share and upgrade the stock to BUY (from Hold).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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