AXIA for GEK TERNA: New target value at EUR 24,80/mg from EUR 21,2/mg with growth margins of 72%

In the context of the 2024 investment strategy on the Greek stock exchange, a new higher target price is given by AXIA, which includes its top options by maintaining market recommendation. In particular, it increases the target price to EUR 24,8/mq (from EUR 21,20/mq above) as it now includes in its assessment and the concession of the Attica Road. The share has been over 9.7% since the beginning of the year, at similar levels to the General Index. Stock Exchange notes the increase in the leverage of the Group, as a result of investments for Attiki Street and Egnatia Road within 2024, but considers that current levels do not reflect the long remaining life span of GEK TERNA’s assets, the increasing and low risk cash flows and differentiated activities. According to AXIA “the valuation multipliers for the Group must be closer to long-life concession companies (example Ferrovial where it makes trade 25x EV/EBITDA and >40x P/E). Sum-of-the-parts valuation exercise for each of the assets separately, including the Attic Road now results in a target price of EUR 24,8/mq”. As regards estimates, the adj. EBITDA for 2023 is expected at EUR 525 million reduced by 20% compared to 2022 following the normalisation of energy market conditions, while for 2024 after the unification of Egnatia Road and Attica Road (both for a small part of the year) the adj. EBITDA is expected to increase by 22% to 641m euros. A total of 2023-2028 adj is expected. EBITDA CAGR 17.6% and EPS CAGR 19% as new projects enter into commercial operation. Finally, for 2023 it expects a dividend of EUR 0,31/kg which will gradually reach EUR 0,70/kg in 2028.