(Finance) – TP ICAP Midcap has coverage started on the title Racing Force, an Italian group active in the sector of safety equipment for motorsport and listed on Euronext Growth Milan. Judgment is Buywhile the target price was set at € 6.1 per share (for a potential upside of over 40%). Analysts are expecting an organic CAGR of revenues by 10.1% between 2021 and 2025 (compared to 7.7% between 2024 and 2019, i.e. before the acquisition of Bell Helmets and Zeronoise), driven in particular by commercial synergies between OMP Racing and Bell Helmets.
A CAGR is estimated EBITDA of about 15.5% between 2021 and 2025, implying a 23.1% at the end of the period. After the IPO in November 2021, the group has a healthy financial situation with a net debt of 3.2 million euros at 12/31/2021 (IRFS 16 included). “This trend is expected to continue in the coming years thanks to improved profitability and cash conversion,” he points out.
Between strengths of the company are cited: two iconic brands and a catalog that covers all protective equipment; partnership with the industry’s leading teams and drivers; a market with high barriers to entry; one of the most advanced research and development forces in the industry, especially in the helmet and electronics sector.
The chance of the sector they are: a renewed enthusiasm for motorsport; the commercial synergies between OMP and Bell can still be exploited; consolidation of the rest of the market (30-35%) which is still fragmented; know-how applicable to other sectors.
Between weaknesses there are: relatively limited size of the historical market (around 250 million euros); still relatively weak presence in the United States; slight seasonality of the outsourcing of part of the production.
Furthermore, i risks from the market they are: consolidation for the benefit of other players in the sector (in particular Sparco and Simpson); failure of diversification projects.