WOOD Flash – Ford Otosan: 4Q17 review – miss on EBITDA, but ahead on net income
All-in-all, we believe that the market may react negatively to Ford Otosan's 4Q17 results, given the higher EBITDA expectations of the consensus and the stock's stellar share price performance in the LTM (74% and 33% in absolute terms and relative to the BIST100, respectively). Otherwise, the results are respectable: the consensus 4Q EBITDA forecast was well ahead of what was implied by the Bloomberg 2017E EBITDA, so it is unlikely to trigger earnings downgrades for the 2018E numbers, in our view.Currently, we have a HOLD recommendation for Ford Otosan, after downgrading from Buy in November 2017. Setting our price target (PT) using a target multiple of 9x on 2018E EBITDA, we reach a 12M PT of TRY 60.70, which implies 5% potential upside on the latest closing price. On our estimates, Ford Otosan is trading currently at 8.3x 12M FWD EV/EBITDA, which implies a 9% discount to its three-year trading average of 9.1x. We note that our 2018E EBITDA is 7% ahead of the Bloomberg consensus, and is one of the most bullish estimates on the street. For now, we do not expect major revisions in our numbers and we find no reason to revise our recommendation.
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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