Attijari Global Research (AGR) maintained its recommendation to buy Mutandis shares, setting a target price of 305 dirhams, over a 12-month horizon, an increase of 17% compared to a price of 260 dirhams observed at the closing of last Thursday’s session.
“At the end of our valuation exercise according to the DCF ‘sum of the parts’ method, we revise our objective price of the Mutandis share to 305 DH against 273 DH initially, justified exclusively by the new acquisition of the company Season. a potential appreciation of the title on the stock market of 17% over a medium term. In the end, we maintain our recommendation to buy the title, “said AGR analysts in a recent note devoted to Mutandis.
On July 30, 2021, Mutandis completed the acquisition of 100% of the shares of the company Season, considered as the reference brand of “premium” Sardine in the United States, recalls AGR, noting that this company would hold a market share of 25% of “Sardine” and 40% of “High-end sardine”.
Thus, in their scenario for the evolution of the main Season indicators, analysts estimate that the average turnover would be around 480 million dirhams (MDH) over the period 2022-2023 with a growth profile of 5%. over the medium term, adding that this will be driven by synergy effects with the parent company, particularly in terms of enriching the product offering (integration of oils, capers, anchovies and olives).
In addition, analysts forecast an average EBITDA margin of 14% over the same period, equivalent to an average level of MAD 67 million, and a net profit of MAD 54 million on average, representing 45% of the recurring profit capacity of Mutandis on the period 2022-2023.
“In the medium term, we retain a CAGR (Editor’s note: Average annual growth rate) around 8%), they add.
By integrating the Season subsidiary from August 2021, the interest charge related to this acquisition and the impact of the increase in input prices on margins, the research firm’s analysts have updated the forecasts of Mutandis growth over the 2021-2023 period.
According to them, the operator’s turnover should show sustained growth through an AAGR of 13.6% to reach 2.077 billion dirhams (billion dirhams) in 2023, while EBITDA should follow. a higher trend taking advantage of the bullish readjustment of margins. “This indicator would stand at MAD 321 million in 2023, an AAGR of 22.7%,” said the same source.
Taking advantage of a positive scope effect, net income group share (RNPG) would reach MAD 132 million in 2023 through a CAGR of 43.2%. This is a target net margin of 6.4% by 2023 against 4% in 2021, an increase of 2.4 points.
In addition, analysts stress that the acquisition of Season “should allow the operator to significantly improve its profitability indicators over the period 2021-2023”, noting that this should be reflected positively on the valuation multiples of the Mutandis share. in stock exchange.
Thus, on the basis of a target earning capacity of MAD 132 million in 2023, the multiple of profits would stand at 15.7x by 2023 against a normative level of 21x for the equity market (25% discount), while the VE / EBE multiple would stand at 7.9x against a benchmark of 10.5x for the Masi index (25% discount).
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