Stifel starts 'undervalued' ALD as 'undisputed car leasing leader' at 'buy'

Ayvens SA

05/12/2022 11:33

** Stifel initiates coverage of Societe Generale-owned ALD
 ALDA.PA  at "buy" seeing it as "significantly undervalued" as
"Europe's new undisputed leader in multi-brand car leasing and
fleet management"
    ** Stifel, which says ALD benefits from recent sharp prices
rise in the used car market, expects the French company to post
record profits in 2022, and that they should remain high, and
for a long time to come, "as the fundamental increase in the
value of vehicles drives up profits"
    ** ALD is trading on a P/E 2022 of just below 4x, Stifel
says, and if used car resale margins were to fall to zero, a
fall Stifel does not expect, and thus halve the group's EPS and
increase the P/E, ALD would still be far from its closest peers
which trade around a P/E of 15x
    ** Even if in the context of recession and vehicle
production recovery in 2023, the used car prices, ALD's most
sensitive profitability driver, and thus group's profits
decline, they should both remain very high in absolute terms,
Stifel adds
    ** It sees the upcoming LeasePlan acquisition boosting cost
savings, visibility, and doubling ALD's size
 (Reporting by Dina Kartit)
 ((dina.kartit@thomsonreuters.com))