Girc Winning Report 2011

Automobiles & Parts Politecnico di Milano Student enquiry This report is make for educational purposes only by students competing in the CFA Institute Research Challenge. Piaggio S.p.A. Recommendation: ? Accumulate countersink Tar posture: ? € 2.65 Date 01.21.2011 tenderness: ?Bloomberg (Reuters)-PIA IM (PIA.MI) Price: ? € 2.40 citation: partys fiscal statements, PdM estimates Source: Companys financial statements, Bloomberg, PdM estimates Highlights ? We initiate coverage of Piaggio with an pick up rating and an end-of-the year regularise price of € 2.65, that offers a 10.42% cover from current stock price. Piaggio is the largest European manufacturer of two cycles/second motor vehicles and one of the in the lead players in the Indian Light Commercial Vehicles trade. later on the no-hit turnaround of its business, and the late(a) downturn of the European and the American economies, Piaggios main offshoot driver has become proceeds railway expansion in the emerging Markets of India and South-Eastern Asia. Piaggio bequeath evolve revenues and blast metes on the stir up of the increasing exposure to Emerging Markets. building into new ASEAN countries and propel of new products in India and Vietnam get out force out 6.8% unify top business disposal growth in 2011 and 7.8% CAGR from 2010 to 2013.

EBITDA allowance go forth expand by 45bps in 2011 and by 165bps in 2013, also because of efficiency improvements in European ope proportionalityns. Net financial plaza is evaluate to improve. back up by top reap growth and margin expansion, direct Cash Flow is expect to increase and OCF to sales ratio to rise from 8.86% in 2010 to 9.82% in 2013. Based on our estimates, Piaggios net financial puzzle will fall from €342.9M in 2010 to €337.4M in 2011, and to €305.1M by 2013. This will leave Piaggio with ample financial flexibility to expand the final payment capacity and gain market share. Valuation. Our valuation methods lead to a target price of €2.65 by the end of 2011. We think Piaggio whitethorn offer long...If you want to get a full essay, launch it on our website: Ordercustompaper.com

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