Sixt: Oddo upgrades rating and raises TP

(CercleFinance.com) - German car hire firm Sixt's management has said that Q4 2020 will, unsurprisingly, be affected by a fall in demand.


Management confirms its annual guidance, based on : 1/ consolidated operating revenues about 1.5 billion euros, i.e.
-40% y-o-y, with Q4 revenues down 44%; 2/ a pre-tax underlying loss of between -70 million euros and -95 million euros vs. 308 million euros in 2019 (Consensus: -81 million euros), Oddo says.

For 2021, management confirms that it expects a gradual recovery in demand from April/May, with acceleration in demand over the season, with it expecting a return to pre-crisis levels by the end of 2021, the analyst adds.

Oddo believes that the group's margin will be sustained by continued cost savings (about 100 million euros p.a. over the next 24 months), as well as high expected fleet utilisation rates over 2021 (cf. its ability to adapt the fleet to demand).

The analyst therefore increases his sales estimates by 7% and 10% respectively to 2,310 million euros and 2,832 million euros. Its estimates for underlying pre-tax profit have been increased by 2% to 216 million euros in 2021, followed by 7% to 305 million euros in 2022.

Oddo has upgraded its rating on the share to buy (vs. neutral) and has increased its corresponding target price to 118 euros (against 100 euros).

It believes that Sixt is currently the best placed player to benefit from a recovery in demand.


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