Barclays upgrades CTT after stock sheds 'unwarranted' premium

CTT - Correios de Portugal SA

19/06/2023 10:23

** Barclays raises Portuguese postal services provider CTT
 CTT.LS  to "equal weight" from "underweight" as the stock has
de-rated from its "unwarranted" levels since 2021 to be more in
line with peers' valuation
    ** The brokerage says CTT has achieved a better regulatory
framework on mail while also setting out an ambitious growth
plan for its other three divisions
    ** "We remain sceptical on CTT's ability to achieve its
medium-term targets, but current multiples on our forecasts are
in line with peers," it says
    ** The broker adds guidance looks too cautious on 2023,
mainly on the financial services unit
    ** Since Q3 2022, CTT has been benefiting from a spike in
public debt placement as people try to protect savings' real
value from inflation, Barclays says
    ** It expects public debt placement to remain significantly
higher than historical values, but says the trend should slow
down, with a normalization in profitability from FY 2024
    ** Out of six analysts that cover CTT, three rate the stock
"strong buy" or "buy" and ​three "hold"
    ** CTT's shares rise about 1% in morning trade

 (Reporting by Tiago Brandao)
 ((Tiago.Brandao@thomsonreuters.com;))