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Marfin Analysis Maintains Buy Rating On Ellaktor

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Marfin Analysis has lowered Ellaktor’s price-target to €3.3 from €4.8, according to a report. 

Marfin comments that the uncertainty that currently surrounds the Greek construction sector does not allow the stock to breath.

Ellaktor’s results were disappointing, as the group has unveiled 2Q11 net losses of €26m and 1H11 ones of €-24m. Construction division’s continuing sinking weighs negatively to company’s fundamentals and valuation. 

Marfin has downward adjusted FY11 estimates projecting sales, EBITDA and net losses of €1.232m, €174m and €-56m respectively. 

Short term pressures will persist, yet should the momentum changes, Ellaktor could be among those stocks that could offer significant upside potential, therefore “Buy” remains, according to Marfin.

“Although we do acknowledge the uncertainty that currently surrounds most of Ellaktor’s activities (especially construction ones), we do believe that the market is overreacting, placing stock’s market capitalization well below the value of its most lucrative assets (ARR’s stake and EGU’s stake), separately. Short-term risk remains high, long term one though could offer lots of excitement.”
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