AutoWallis: Earnings Recovery Delayed
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Commodities - Technical Analysis
Gold and silver have tested key support levels that must hold for short-term long opportunities to remain valid. A momentum divergence has emerged during oil’s rally, which could weaken the long side and signal the onset of a correction. Natural gas prices have remained above the uptrend line for now, though the technical picture shows no significant shift or clear direction. Copper’s uptrend has broken down, so prices may weaken further before reaching a favorable buying zone again. Wheat and corn prices entered a correction phase two weeks ago, so for now, it may be worth waiting for more favorable entry opportunities.
Netflix Goes to the Movies
Netflix has repeatedly demonstrated its ability to adapt to structural changes across the media industry. Its latest initiative represents another potentially important shift, with the company preparing to test substantially longer theatrical release windows for selected films. While the initiative is unlikely to have a material near-term earnings impact, it could support the development of an additional revenue stream, improve content monetisation and help Netflix build blockbuster franchises that have so far remained largely absent from its portfolio.
Following the latest quarterly results, we have revised our DCF model and earnings estimates. We cut our 12-month price target to HUF 158 and downgrade the shares to Hold from Buy. The challenges facing the Distribution business unit have not been resolved and, if anything, intensified during the first half of the year. This was the key driver behind our downward revisions to this year’s revenue and earnings forecasts.
Growth also slowed in Retail, while margins remained under pressure. We therefore expect the recovery in profitability to take longer to materialise and to be less pronounced than previously anticipated. Mobility continues to stand out in terms of earnings generation, but its contribution at Group level remains too small to offset the weak performance of the automotive distribution and retail businesses.
Following the model update, we forecast a low-single-digit revenue CAGR of 3.6% and an EBITDA CAGR of 7.4% over the forecast period. As before, our updated model does not incorporate any future acquisitions. On this basis, we expect revenue to approach HUF 570bn and EBITDA to reach approximately HUF 27bn by 2030. These figures are well below management’s current targets, raising the question of whether the financial targets set out in the company’s previous 2028 growth strategy will need to be materially revised.
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