Besalco: HOLD
Current Price: $750 Target Price: $850 Upside: 13%
More than just a construction company
We
are updating our coverage of Besalco, maintaining our HOLD
recommendation but downgrading our 2013YE T.P. to CLP$850, implying an
upside of 13%. In our view, Besalco
stands as a solid and stable company, with long-term relationship with
its clients. However, we are taking a more conservative stance towards
future margin
improvements given that, since our last update, margins came in below our expectations due to higher labor cost. Current valuations of P/E 2013E of 21.9x are in line with historical averages and we believe are fair given our expectations of 14% CAGR of net income between 2014-2017.
improvements given that, since our last update, margins came in below our expectations due to higher labor cost. Current valuations of P/E 2013E of 21.9x are in line with historical averages and we believe are fair given our expectations of 14% CAGR of net income between 2014-2017.
