Cairo - Mubasher: Pharos Research said it initiated El Sewedy Electric with a buy recommendation, where it set the company's fair value at EGP64 per share, offering an upside potential of 15%..
El Sewedy is trading at much more attractive multiples than emerging market peers, with EV/EBITDA 2016e of 4.5x and P/E2016e of 4.9x.
"We project strong earnings momentum in FY2016-2017; Spike should level off by 2018 but remain above historical average, “said the research house.
El Sewedy Electric is set to book record-high profits in FY2016, which Pharos estimates at EGP 2.56 billion, with an exceptionally high ROAE of 37%.
Despite projecting strong earnings in 2017, with a ROAE of 24%, Pharos estimates that the profitability of El Sewedy would stabilize at 17% ROAE in 2018-2022.
