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GD RT         Turnover  mln.

Eurobank Equities raises target price for Ellaktor

Eurobank Equities retains “Buy” recommendation on the shares of Ellaktor while revises the target price to EUR3.40 from EUR3.10 previously to reflect  an upgrade at construction and concessions (ARR) segments and lower net debt assumptions.

According to a report, although the valuation looks fair on static multiples (5.3x 2013e and 4.7x 2014e target EV/EBITDA ex non-recourse net debt), the target price implies a large upside from current levels, reflecting: (1) significant asset base (2) further deleveraging capacity and (3) potential for significant cash flow improvement going forward if the group collects some EUR47mn concessions-related construction receivable and/or dividend income from the ARR concession proves to be higher than our admittedly conservative forecasts.

According to Eurobank Equities despite the large upside, the stock is not included to the Top Picks list given the higher risk for equity investors compared to the rest of our equity universe (1.0x interest coverage ratio).
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