Erste analysts today lowered the target price of HT stock from 310 to 300 kuna, and confirmed the ‘hold’ recommendation, after HT announced its quarterly business results at the end of last week.
HT reported on Friday that in the first quarter of this year, the group recorded a 6 percent decline in revenue compared to the same period last year, amounting to 1.94 billion kuna, while net profit fell by 34.2 percent to 384 million kuna. While the revenue decline was slightly better than the expectations of Erste analysts, the drop in net profit was significantly greater than their estimate of approximately 10 percent, or the analysts’ consensus of 13.5 percent. The target price for HT stock was lowered by Erste analysts due to the reduction of their previous estimates for the company’s net revenues this year and earnings per share (EPS). Erste analysts revised their revenue estimate for HT from the previous ‘slight to moderate decline’ to ‘moderate decline’.
However, as stated in their report on the company, they expect that the acquisition of Combis, which is expected to be finalized in the second half of the year, will increase HT’s revenues in 2010 by approximately 170 million kuna. Therefore, Erste analysts now estimate HT’s net revenues for this year to be only slightly lower, at 8.23 billion kuna. They still expect that net profit this year will be at 1.78 billion kuna. However, they have lowered their earnings per share (EPS) estimates for 2010 by 7.9 percent to 21.76 kuna, and for 2011 by 4.6 percent to 23.04 kuna. Last year, HT achieved net revenues of 8.52 billion kuna, with a net profit of 2.02 billion kuna, and earnings per share reached 24.72 kuna. (H)
