Coverage

In Line 1Q Results, in a Still Soft Market

"No significant surprises came from EQUITA’s 1Q24 results, which confirmed a still general soft market activity (i.e. ECM) albeit with some first visible signs of recovery (M&A). We confirm our 2024E-26E estimates. We maintain our positive view, which relies on: 1) a sound growth profile (high single-digit CAGR over 2020-23 period, despite tough market conditions); and 2) a solid balance sheet (IFR at 3.6x at end-March), allowing both a rewarding dividend policy (a 9.8% average 2024-25E yield at the current share price, 8.8% 2024E) and the option of accelerating the growth trajectory by deploying the excess capital through potential acquisitions as just announced with K-Finance minorities’ buy-out"

"We confirm our target price of EUR 4.6. Given an upside potential of approx. 13%, we confirm our BUY rating. Our positive view relies on: 1) a sound growth profile; and 2) a solid balance sheet, allowing both a rewarding dividend policy (a 9.8% average 2024-25E yield at the current share price, 8.8% 2024E) and the option of accelerating the growth trajectory by deploying the excess capital through potential acquisitions. We highlight that on 20 May Equita will pay the first tranche (EUR 0.20/sh., implying a 4.9% yield at the current share price) of the 2023 dividend, with the second tranche (EUR 0.15/sh.) payable in November"

Q1 results and minorities buyout of EQUITA K Finance

"Q1 results came in largely as expected, suffering from the lower revenues of the own trading portfolio and from the lower fees of ECM deals"

"The company announced the buyout of the 30% of Equita K Finance for EUR5.7m split between cash and new shares. There is a 2% average positive impact on the EPS 2024-26E"

"The outlook of management is more positive for all three divisions for the next quarters (and mostly for H2 for the Investment Banking and Alternative Asset Management)"