Analyst Juergen Wagner from Stifel Nicolaus maintained a Buy rating on AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (0O5C – Research Report) and keeping the price target at €28.00.
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Juergen Wagner has given his Buy rating due to a combination of factors including the positive surprise from the disposal price of AT&S’s Korean business and the implications for the company’s financials. The sale to SO.MA.CI.S, an Italian PCB maker, was concluded for an impressive €405 million, which is notably higher than expected, valuing the sold business at approximately 10 times its EBITDA. This substantial inflow from the transaction is anticipated to alleviate concerns regarding AT&S’s ability to refinance, given that the funds can be used to address debt obligations, thus potentially improving the company’s debt profile.
Moreover, Wagner’s outlook on AT&S is buoyed by the forecast of robust long-term sales growth. He projects a significant compound annual growth rate (CAGR) from 2024 to 2027, estimated at 25%. This growth trajectory is underpinned by increasing penetration of IC substrates within AI/HPC and smartphone applications, sectors expected to expand in the coming years. Despite a reduction in full-year guidance following the disposal, the long-term targets for sales remain high, with expectations for revenue to reach around €3 billion, coupled with a stable EBITDA margin forecast. These elements collectively reinforce Wagner’s Buy rating on the stock, signaling confidence in AT&S’s future performance.
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AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (0O5C) Company Description:
AT&S Austria Technologie & Systemtechnik AG manufactures printed circuit boards and operates through three segments: Mobile Devices and Substrates; Automotive, Industrial and Medical; and Others. The products are manufactured in the European and Asian markets and are directly distributed to original equipment manufacturers as well as contract electronic manufacturers. It has a wide geographical reach with production facilities in Austria (Leoben and Fehring) and plants in India (Nanjangud), China (Shanghai, Chongqing) and Korea (Ansan, near Seoul). Majority of its revenues are derived from the Mobile Devices and Substrates segment, which is responsible for the production of printed circuit boards.