AutoWallis: Driving growth amid market challenges
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We have revised our DCF model and earnings estimates following the latest quarterly report: we raise our 12-month target price to HUF 210 and maintain our Buy recommendation. If the company can successfully continue its acquisition strategy this year, our increased target price could prove conservative.
Currently, the short-term outlook for the European car market is not very supportive (although there has been some positive news recently), but we believe that the CEE markets where AutoWallis operates could grow faster, similar to last year.
In 2024, the company completed two acquisitions in the Czech Republic, the positive effects of which will be fully materialised from this year onwards. These acquisitions will not only increase sales, but also bring economies of scale. In addition, the focus will remain on expanding the higher-margin service business, which should continue to deliver above-industry earnings growth momentum.
Over the forecast period, we expect single-digit CAGR (7.5%) and EBITDA growth of ~10%. The updated model includes last year's two Czech acquisitions but excludes future planned acquisitions, so revenues could exceed HUF 570 billion and EBITDA could reach HUF 32 billion by 2029.
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