DJ Edison Investment Research Limited: Edison issues initiation on Stern Groep (STRN)
Edison Investment Research Limited
Edison Investment Research Limited: Edison issues initiation on Stern Groep
(STRN)
13-Oct-2020 / 15:08 GMT/BST
London, UK, 13 October 2020
Edison issues initiation on Stern Groep (STRN)
Downturns tend to be opportunities to invest in car dealerships, especially
those that are likely to emerge stronger. Stern is well positioned to
weather the current storm with its significantly restructured organisation.
Its valuation is undemanding at 9.8x 2021e P/E and there is additional
optionality in light of a potential merger with much larger Swedish
automotive group Hedin.
Stern is trading at an FY21e P/E of 9.8x compared to the peer group average
of 10.9x. Applying the average multiple and adding the market value of the
stake in insurer Bovemij (&euro3.17 per Stern share) results in an implied
valuation of &euro16.6/share. Scale is becoming even more important in light
of the structural market changes and Stern and Hedin, a much larger Swedish
automotive group, recently restarted their merger talks. Although no details
have been released so far, we note that most of the company's recent
divestments were made at a price to book value in excess of 1x. With Stern's
reasonably well impaired book value of &euro23.54/share at H120, we believe
this could provide some support in the ongoing merger discussions with
Hedin.
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About Edison: Edison is an investment research and advisory company, with
offices in North America, Europe, the Middle East and AsiaPac. The heart of
Edison is our world-renowned equity research platform and deep multi-sector
expertise. At Edison Investment Research, our research is widely read by
international investors, advisers and stakeholders. Edison Advisors
leverages our core research platform to provide differentiated services
including investor relations and strategic consulting.
Edison is authorised and regulated by the Financial Conduct Authority [4].
Edison is not an adviser or broker-dealer and does not provide investment
advice. Edison's reports are not solicitations to buy or sell any
securities.
For more information please contact Edison:
Edwin De Jong, +44 (0)20 3077 5700
industrials@edisongroup.com
Learn more at www.edisongroup.com [5] and connect with Edison on:
LinkedIn https://www.linkedin.com/company/edison-group- [6]
Twitter www.twitter.com/Edison_Inv_Res [7]
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1140686 13-Oct-2020
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(END) Dow Jones Newswires
October 13, 2020 10:08 ET (14:08 GMT)
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