FY ’21 EBIT yet unlikely to reach the highs seen in the past
We now expect Q4 order intake at EUR 19m when excluding the large EUR 55m Russian project. We estimate the smaller project deliveries orders at EUR 7m, a figure which is clearly above the very low benchmark figures. We expect technology services order intake at EUR 12m, in other words slightly down y/y but meaningful improvement q/q. The past few reports have painted an overall muted business picture, however there is a decent chance the outlook is already improving. We nevertheless think the recent share price gains have made near-term multiples too dear as the overall uncertainty level remains very much elevated.
In our view recent gains make downside relatively likely
We expect Raute’s top line to grow meaningfully, by ca. 15% y/y, in FY ’21. We make small revisions to our FY ’21 EBIT estimate, and now see the figure at EUR 6.4m (previously EUR 6.0m). This would still be far from the ca. EUR 11m EBIT that Raute averaged annually in 2016-19. Significant earnings potential remains for the coming years, but in our opinion the share has appreciated too steep considering all the uncertainty. We don’t see upside on the current 8x EV/EBITDA and 13x EV/EBIT multiples on our FY ’21 estimates. The valuation doesn’t look that expensive relative to long-term potential and in terms of the respective FY ’22 7.5x and 10x multiples, but we think this potential remains too far in the future. Our new TP is EUR 20 (18), rating SELL (HOLD).
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