Mytilineos: How analysts saw the financial results – The target prices for the share

THE Mytileneos becomes the first purely Greek company to be included in the largest European stock market index (FTSE 100), taking advantage of its organic growth as well as positive course of the Greek economy in recent yearsas analysts note in the wake of the listed company’s announcements for the first quarter of 2024, where it stated net profit after minority rights enhanced by 10%, while the earnings before taxes, interest and depreciation (EBITDA) increased by 12%.

“Therefore, it is expected that the key ambassador of Greece in Europe’s most important index, shedding more light on the Greek market, further strengthening the extroversion of Greek companies” is typically emphasized in analyst reports. At the same time, it will maintain the Greek listing as while growing it will significantly strengthen its business base within Greece, as they underline.

Morgan Stanley

THE Mytileneos has begun a review and evaluation of its strategic options, says Morgan Stanleyincluding the evaluation of various organic and inorganic growth opportunities, its capital allocation model, optimal balance sheet structure and appropriate stock market structure. In this context, it examines a possible listing on an international stock exchange, including the London Stock Exchange, within the next 12-18 months, while maintaining a listing on the Athens Stock Exchange.

First quarter EBITDA was in line with Morgan Stanley analysts’ forecasts, net debt was modestly higher.

Citi

THE Citi maintains a buy recommendation on its stock Mytileneoswith target price 46 euros after the first quarter results. The American bank believes that the results will give analysts a handle to revise the Group’s earnings upwards, given the strong performance in the energy sector and the improved prospects for the metal sector.

For this year, Citi predicts revenues of 5.39 billion euros and net profits of 686 million euros. Mytilineos’ stock valuation for this year is just 7.7x in terms of earnings and 6.2x in terms of EV/EBITDA while for 2025, the stock’s valuation indices are even lower. The dividend yield is estimated at 4.5% this year and 4.7% in 2025. Citi estimates that in a positive scenario for the stock, the target price could rise to €53.3, or about 40% higher.

“Earnings exceeded our expectations for the first quarter, while the prospects for the remaining quarters in all businesses look better. Net borrowing in the quarter fell to €1.6 billion from €1.9 billion, well below our expectations, due to better-than-expected cash flow developments and possibly working capital. Metals and Energy activities contributed equally to the quarter’s results, with the metals business posting 8% gains versus our expectations, while the annual increase in energy activities amounted to 23%. The most important point was Greek energy production that exceeded our expectations by 40%, increasing on a quarterly basis despite unfavorable seasonality. New CCGT units contributed about 50% of electricity generation in the quarter,” Citi points out.

Euroxx

THE Mytileneos he announced a strong first quarter exceeding our consensus and forecastssays the Euroxx, recording an increase in earnings per share of +10% year-on-year. Growth is mainly driven by the energy sector, despite significantly lower energy and metals prices.

The renewable energy sources and asset turnover in particular continued to contribute to year-on-year growth, supported by higher production due to increased capacity.

The EBITDA for the quarter were up 12% year-on-year to €252m, 4% above our forecastsmanaging to achieve a 5.5% profit margin expansion.

The EBITDA for energy came to €184m, up 23% year-on-year, thanks to strong performance from the MRES asset rotation plan, as well as thermal power generation, which also represents the contribution of the new 826MW H-Class CCGT unit.

At the same time, Euroxx comments on the fact that the Group is considering its possible simultaneous listing on an international stock exchange, including London Stock Exchange (LSE)reiterating its commitment to the Greek economy, with the expectation of maintaining its introduction to Athens Stock Exchange.

In our opinion, states the stock exchange, given the size of MYTILpotential LSE listing could trigger FTSE 100 inclusionwhich is a key factor in enhancing liquidity.

OPTIMA

THE OPTIMA notes that Mytileneos presented one fixed set of results, in a seasonally weak quarter (renewables activity is back-loaded during each financial year) and despite the adverse effects of the pricing environment in the energy and aluminum markets, which has hurt the profitability of its international bonds, demonstrated the resilient properties of the collaborative and diversified business model. Towards this end, as shown by the strong performance in Q1 24 another record high in 2024Mytilineos is located well on its way to responding in estimates for EBITDA of €1.14bn in FY2024, with a share valuation of 6.6x in EV/EBITDA terms.

Furthermore, regarding the company’s aim to become the Greek representative in London’s FTSE 100, (Mytileneos is the first Greek company to ever set such an ambitious goal), our view will provide further support to the stock. Having said that, we reiterate our buy recommendation on the stock with earnings at €49.0/share.

Beta

H Beta points out that the group has formally announced that it is evaluating dual listing in the next 12-18 months, potentially on the LSE. As far as the results are concerned, it speaks of a good start supporting the targeting of an EBITDA level of 1.05-1.1 billion euros. The Group trades at 6.3x EV/EBITDA, with expected earnings of 8.8x.