Count Dis schreef op 21 november 2021 17:15:
Van het Engelse forum.
uk.advfn.com/stock-market/london/rene...Stifel Report below: Renewi plc November 19, 2021 Target Price 905p Following on from last week's interim results and Stifel sales team briefing with Renewi's CFO yesterday we retain our Buy recommendation, lift our estimates and target price from 864p to 905p. Commodity prices discussion: Given the topical nature of recyclate/commodity prices a key part of our meeting was on the impact upon estimates of currently buoyant prices that Renewi is able to achieve in selling their recycled products currently. To summarize: • Looking back: H2 2021A to March saw Renewi estimate that the benefit from inflated prices increased EBIT by EUR6m. During H1 2022A, as prices continued to increase, Renewi estimate the boost to EBIT was EUR23m. • Looking forward: Management are guiding to EUR105m of EBIT for FY22E to March. This guidance assumes prices normalize. Were prices to remain at current levels, then there would be an additional EUR10m over the current guidance, i.e. EBIT of EUR115m rather than EUR105m. Where are our estimates? See page 3 for detail on our revision, but to summarize our view: we are somewhere between current prices and normal prices at EUR108m of EBIT for FY22E. Where we have modified estimates is to add EUR10m to our FY24E EBIT as we have become more confident in management's guidance of at least EUR60m of incremental EBIT from their strategic priorities; namely ATM recovery, Renewi 2.0 (selfhelp) and the Innovation Portfolio contribution. Price target lifted: This step up in our FY24E EBIT estimate is the driver in our DCF based price target upgrade from 864p to 905p. Answers on a postcard please: The multi-million Euro question for management is of course: Is the EUR60m additional contribution from the three strategic initiatives by 2025 an increment on the EUR75m of EBIT in the year that they were announced, or the current year guidance of EUR105m? There is of course a very large delta on what that means for 2025 EBIT; EUR135m, or EUR165m. The answer lies in 2025 commodity prices, neither Renewi, nor this author has a firm view on that. For reference, our 2025 EBIT in our DCF model is EUR139m giving a DCF value of 905p - change that number to EUR165m and hold the margin into perpetuity and the DCF value increases to 1,377p (that would assume record commodity prices forever, more than ambitious in our view). We see the main open question to monitor as being to what extent there is a structural increase in demand from industry due to increased penalties from authorities for using virgin commodities, and increased demand for products with higher recycled products from more aware consumers.