Inbox: Tieferes Kursziel von der RCB für Wienerberger

Akt. Indikation:  35.08 / 35.12
Uhrzeit:  15:04:19
Veränderung zu letztem SK:  1.15%
Letzter SK:  34.70 ( 1.05%)

We confirm the BUY recommendation for Wienerberger but have moderately lowered the target price to EUR 23 from EUR 24 due to slightly lower forecasts. The shares experienced a sell-off of more than 10% yesterday. To us, this looks rather like the reaction to a profit warning than to basically in-line quarterly figures and a confirmed FY guidance. We acknowledge that there was light and shadow in the release, but we deem the hefty reaction excessive. We think it was primarily fuelled by the managements more cautious assessment of the German residential market which is now perceived as stable as opposed to growing (housing starts >2% in the companys definition) previously. The slowdown is explained by a decline of building permits in 1H. We remind that DE accounts for some 9-10% of group sales and has an under-proportionate EBITDA contribution. However, at the same time, the company has become more upbeat on CZ and BG (we point out that profitability in EE is above WE) and the overall take on the European brick business remained positive, which we think is underscored by the solid performance in 2Q. In the plastic pipes and concrete pavers business units the management also observed improving momentum in Eastern Europe, driven by public infrastructure projects demand. In Western Europe, as of 3Q higher selling prices for plastic pipes should compensate for rising raw material costs that weighed on 1H earnings. Also, although the 2H prospects for the international project business remain unchanged muted, Wienerberger guides for an EBITDA stabilisation of Pipes & Pavers in 2H. This heralds a sharp improvement over the nearly 30% drop in 1H. All told, we stand by our positive view on the investment case. We think that yesterdays closing price discounts too cautious earnings assumptions. Even if there was no earnings growth in 2018 (i.e. EBITDA stable at EUR 415 mn), assigning an EV/EBITDA multiple of 7.5x would result in upside of about 10%.