Citi: Raises target price for Mytilineos – Remains buy

Citi sets a new higher target price for the share of Mytilineos, maintaining the “buy” recommendation. In particular, as it states in its report dated March 23, the new target price is set at 22 euros, from 21.50 euros previously, with the rise margin being close to 60% of the current levels.

As the American bank explains, its estimates are based on the more than doubling of profitability for 2022 (compared to that of 2020), and has as its main axes the following:

1. A particularly favorable environment for metallurgy, with record prices for aluminum and premiums while costs remain locked at very low, for the season, levels

2. Another very strong year for the Power & Gas sector, as, contrary to market estimates so far, Citi estimates that Mytilineos will be significantly strengthened in 2022, both by the addition of the new power plant and by the efficiency of existing plants that can boost their profitability even at high gas prices.

3. The further strengthening of the Renewable Sources Development & Energy Storage sector, which matures a portfolio of ~ 5GW RES projects abroad, which in combination with the ~ 2GW RES projects developed by the company in Greece, create a strong RES pipeline of ~ 7GW.

Citi estimates that, for Mytilineos, growth has come to stay, as profitability is expected to grow steadily in the coming years. The analyst expects a threefold profitability in 2024 compared to 2021.

The above, combined with the high dividend yield, which the Citi analyst places at ~ 5% in 2022 and ~ 8% in 2024, confirms the assessment of the President of the company, that Mytilineos is the ideal combination of a Development company ( Growth stock) and Value stock.

Equally important is the analyst’s assessment that, despite the high investments, the leverage of the company remains low and will continue to decrease (from 2.2x in 2021 to 1.0x in 2024), due to the consistently strong operating cash flows of the company.