SRH AlsterResearch AG Initiation: TAKKT AG - Growth driven by digital transformation; Initiate with BUY
TAKKT reported better-than-expected 2020 results, with top line coming slightly ahead of its recent guidance and EBITDA coming in the upper end of the forecast range.
TAKKT AG
Industrial Goods & Services
Market Cap EUR 770m
BUY, PT EUR 17.00 (upside 45%)
Link: TAKKT AG_initiation
TAKKT reported better-than-expected 2020 results, with top line coming slightly ahead of its recent guidance and EBITDA coming in the upper end of the forecast range. Management expects a challenging Q1 2021, owing to pandemic-related economic trends as lockdowns were extended in many regions and a high comparable base. Nevertheless, the company believes its business should see marked improvement over the course of the year, depending on the progress of the Covid-19 vaccinations and easing of lockdown restrictions. The group will provide further details and guidance in its 2020 annual report on 29 March. We assume the company to achieve pre-crisis margins in the mid-term (in 2023E), backed by its reorganisation as well as digital transformation. TAKKT generated its strongest FCF in 2020 and in this we see the qualitative proof of the cash flow generating business model. We initiate coverage based on our FCF model with a price target of EUR 17.00. BUY.
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