Despite the US and Egyptian businesses driving operating profits up by cE40m this year and upping group EBITDA margins by 210bps; albeit from a low of 15.7%. Our target price is at E24.3 or at 9.5x 2016 EBITDA. Catalysts 1) pickup in Greek private …to access this report contact@researchgreece.com

On limited upside potential despite the US and Egyptian businesses driving operating profits up by cE40m this year and upping group EBITDA margins by 210bps; albeit from a low of 15.7%. We model EBITDA of E260m by 2016 which compares to … continue reading contact@researchgreece.com

We downgrade the shares to DOI on limited share price upside potential due to EPS cuts again. In retrospect we should have downgraded Titan in June at E26; we underestimated Egypt. Today we reduce our EBITDA by 9% on average over 2014-16 or by 19% since our upgrade. We expect Egypt related EBITDA to hit an all time record low. Before solving the energy problem on the back of two coal mills and recovering in 2015. We conclude this year should be one of the same for Titan with EBITDA at par with last year. Next year we model incremental EBITDA of E39m with US 43% of the delta and Egypt 38%. Forecasting the Egyptian business is impossible at best – the reason behind our DOI rating. Our new target price is at E22.7 or at 7.7x 2016 EBITDA.

Greece is +13% since the elections with ADV >E280m; we conclude this is driven by re-rating rather than upgrades in earnings; only a handful of companies have scope for upgrade in earnings in our view; the ones that combine both catalysts (re-rating and EPS upside) are Jumbo (OI), Titan (OI), Eurobank (OI) and Motor Oil (OI); in our research note we compare 2016E with 2007-08 peak earnings (scope for upgrades; p. 5); we test 200bps lower discount rates (re-rating; p. 8); we highlight points from IMF’s latest review on Greece (p. 9).  …to access this report contact@researchgreece.com

Titan has reset for growth. US operations – the strongest link over the next couple of years. Group sales CAGR of 10% and operating leverage leads to EBITDA margin expansion. Despite our cautious stance on Egypt and Turkey,  Titan should expand its EBITDA margin by 630bps by 2016E . This is not in the price we think. FCF >E100m per annum despite increase in capex to satisfy demand. In 2013 Topline growth of 4% in 2013 and EBITDA margin of 16.7% is pretty impressive, considering the E21m negative FX hit. Looking ahead…to access this report  contact@researchgreece.com