(Finance) – Alantra has initiated coverage on Comer Industriesa company listed on Euronext Milan and active in the design and production of advanced engineering systems and mechatronics solutions for power transmission, with a target price of 45.0 euros per share and one “Buy” recommendationgiven the potential upside of 65%.
Analysts talking about a “established and leading” manufacturer in power transmission systems worldwide, and see Comer Industries as “destined to maintain its leadership in the agricultural sector (AG, estimated market share of 25%) and to grow further in the construction machinery market (CE; 9 %)”. Although the reference market is normalizing, i medium-long term drivers (for example the increase in crop yields) represent clear favorable elements for the group’s growth path.
Overall, Alantra expects Comer to post a FY22-25 CAGR of 3.4% in net sales. L’EBITDA expected to record a CAGR of 8.7% FY22-25 at €231m/16.9% margin in FY25, driven by confirmation of the group’s proven pricing power and further cost synergies expected from the integration of WPG.
The solid BS is set to strengthen further with an expected average FCF/EBITDA conversion above 55% in FY23-25, thus reaching the net cash position by 2025 and triggering further M&A firepower (over 300 million euros).
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