Etteplan - Outlook in focus

Etteplan reports Q4 results on February 7th. With signs of slower growth in the global economy the market outlook and guidance are of key interest. We expect the Q4 results to show good performance, with our revenue and EBIT BO estimates at EUR 66.0m and 6.7m (Q4/17: 58.5m and 5.4m) respectively. We expect a dividend proposal of EUR 0.30 per share. With valuation looking fairer after share price inclines we downgrade to HOLD (BUY) with a target price of EUR 9.0.

Comments on market outlook and guidance of key interest

The growth in the global economy has been showing signs of slowdowns due to among other things the US-China trade war and changes in GDP growth forecasts for the near-term have been seeing a slightly declining trend. An adverse shift in engineering companies’ willingness to make investments would have an effect on the engineering services sector. As the effect of any weaker demand is not yet clearly comprehensible Etteplan’s comments on the market outlook along with the guidance for 2019 are of key interest. Despite increased uncertainty we still expect guidance to reflect growth in revenue and operating profit.

Expect DPS proposal of EUR 0.30

Our estimates ahead of Q4 remain intact. Our Q4 revenue and EBIT BO estimates are at 66.0m and 6.7m respectively. Etteplan has not specified a dividend policy but as the dividend has typically corresponded to around 50 % of EPS, we expect a dividend proposal of EUR 0.30 per share.

HOLD (BUY) with a target price of EUR 9.0

Etteplan’s share price has seen increases during 2019 and valuation when comparing to peers seems fair. We value Etteplan at 8.8x 2019E EV/EBITDA. We downgrade our rating to HOLD (BUY) with a target price of EUR 9.0.

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