This is what comes to mind when looking at Helex trading multiples. It would take more than…

Tourism / Fourlis / Helex / Banks

Greek banks recap should add c.E10bn to the average market cap (E45bn 9M). At 50%-60% velocity we estimate banks should add c. E25m to December ADV and push Q4 towards E50m (E84m in 9M) and FY at E75m. They will also contribute E2.5m in new issue fees (one off) and help EBITDA reach E4m for the quarter and E12m for the full year with the shares trading 17x EBITDA 2015. Next year should be better on ADV of E100m implying EV/EBITDA of 13x – albeit still high. We were far more generous before with ADV of E130m-E150m; our new ADV of E100m means we are lowering our EBITDA estimates by 30-35% in 2016-2017 and our net income estimates by almost 50%. New PT at E3.8 (was E4.7); we reiterate DOI rating.

We lower our EPS estimates by 17%-24% on 12%-18% weaker ADV for 2015E-2017E; it will take more than YTD ADV of E107m for shares to re-rate. Actually, it will take an agreement on the sovereign front – one that will keep Greece afloat and urge investors to lift up banking stocks which have underperformed the market on a 12-month basis. Because it will be trading rather than structural reasons pushing up velocity rates and market values of equities we reiterate DOI on the shares. Readers can check sensitivities on different WACC/ADV pairs inside the note attached.

We downgrade our rating to DOI as the recent one-month rally on the shares (+29% vs. +6% for the Athens Index) has pushed the share price at par with our price target. We believe there is far bigger upside elsewhere in our Greek equities universe. Further upside requires…contact@researchgreece.com