Coverage

Soft Year-End in 2024; High Dividend Yield Confirmed

"EQUITA's 4Q'24 results were softer than our estimates, both at the top and bottom line, with each business unit’s revenue declining double digit yoy, leading to a -9% drop in FY'24 total revenue in a still challenging environment for equity capital markets. A strong start to 2025, coupled with investments made last year, saw management provide a positive outlook, with an expected ECM recovery in the last part of the year. The BoD proposed an unchanged FY'24 DPS of €0.35/share (~8% yield). Going forward dividend distribution will follow LT net profits’ growth. An anti-dilution policy was also announced to offset the LTI plan."

"Following our estimates revision we set a new target price of €4.7. We downgrade the shares to HOLD, as we now see the stock as fairly pricing in the expected upturn in business activity in 2025, also considering the current visibility in particular on the recovery in ECM in 2H'25."

Dividend story intact, but now fairly priced

"EQUITA reported a softer-than-expected Q4, with results coming in 5% below our estimates (KECH), consistent with the muted trend seen throughout the year. In this context, we revise our forecasts for FY 2025E and FY 2026E, and introduce estimates for FY 2027E."

"Our FY 2025E estimates move marginally higher, reflecting earlier-than-expected recognition of carried interest, slightly stronger Sales & Trading revenues amid sustained market activity, and strong Q1 guidance. Conversely, we make modest downward revisions to FY 2026E, alongside a c. 3% cut to our DPS assumptions, now at € 0.37– 0.39 for FY 2025–27E, in light of management’s intention to retain payout flexibility ahead of the upcoming board renewal and potential introduction of a new remuneration policy."

"The combined effect of a marginally lower DDM valuation (due to DPS revision) and slightly stronger FY 2025E operating assumptions leaves our EUR4.50 target price unchanged. However, with limited upside and much of the FY 2025E rebound and sector consolidation optionality already priced in, we downgrade our rating from Buy to Hold."