Analysts from Raiffeisen Bank (RBA) have lowered the target price for HT stock to 281 kuna, giving it a ‘hold’ recommendation. RBA analysts have reduced their earnings estimates for HT following weaker-than-expected profits reported in the first quarter of this year.
HT’s earnings in the first quarter were 34.1 percent lower compared to the same period last year, amounting to 384 million kuna, while revenues fell by six percent to 1.94 billion kuna. RBA analysts had expected the company’s earnings in the first quarter to be 448 million kuna. They now estimate that HT’s earnings for the entire year of 2010 will amount to 1.73 billion kuna, compared to a previous estimate of 1.97 billion. Consequently, RBA has also lowered its 12-month target price for the stock, including dividends, from 292 to 281 kuna per share.
"On the other hand, the price of HT stock has significantly dropped below our new target price of 281 kuna per share, therefore we have changed our recommendation for this stock from ‘reduce’ to ‘hold’", state RBA analysts in their new assessment. This year’s sales revenue for HT is estimated by RBA analysts to be 8.23 billion kuna, while they previously expected 8.16 billion. They also assess that the acquisition of Combis, an IT systems integration company, fits well into HT’s core business. "We estimate that Combis could contribute 200 million kuna to HT’s revenues this year, and 330 million next year. In our opinion, this acquisition should help slow down the trend of declining sales revenue next year", it is stated, among other things, in the assessment by RBA analysts. (H)
