Mid-term benefits at premium valuation: Stifel resumes Reply with 'hold'

Reply SpA

16/12/2022 12:56

** Stifel resumes coverage of Reply  REY.MI  with a "hold"
rating and a TP of 119 euros ($126.38), saying it expects the
Italian IT services operator to benefit from medium-term sector
growth and M&A opportunities
    ** "However, the market recognises this quality profile,
with the stock trading at a premium to its peers," Stifel says
    ** Even with a potential demand slowdown in 2023, the broker
expects the group to reach annual organic sales growth of 10%
with an EBITDA margin of around 16% in the medium term
    ** For next year, it sees slower organic growth vs prior
years and a margin normalisation due to temporary dilution from
recent acquisitions and different cost lines back towards
pre-COVID levels
    ** Out of seven analysts that cover Reply, four rate the
stock "strong buy" or "buy" and ​three "hold"
    ** The stock is down 6% in early afternoon trade, among the
worst performers on the pan-European STOXX 600 index  .STOXX 
that falls 0.9%
($1 = 0.9416 euros)
 (Reporting by Alessandro Parodi)
 ((alessandro.parodi@thomsonreuters.com))