WAG Payment Solutions (Eurowag): progressing towards unification (stays BUY)
Following the interim results, we have updated our estimates for WAG Payment Solutions (Eurowag, EW) and raised our 12-month price target (PT) by 2%, to GBp 123/share, maintaining our BUY on the stock. We have lowered our updated 2025-27E revenues by 7%, the adjusted EBITDA by 12%, and the adjusted EPS by 23%, which now imply 2024-27E CAGRs of 11%, 11% and 24%, respectively, and a low-40%s adjusted EBITDA margin in 2026-27E (c.43%; the 2019-23 average was 43.2%). Regardless, we see the cumulative cash from operations 7% higher than previously, on higher D&A and improved WC control. We maintain our core thesis, i.e., that margins will improve as EW migrates customers to the new platform and shuts down the legacy systems. Given the scope of the work, however, this is a story for 2027E, a year later than we anticipated previously. On our PT, the stock would trade in line with its peers on the 2026-27E P/Es and median EV/EBITDAs.
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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