Initiation of Coverage, Research 1 Jun 2023
INITIATION OF COVERAGE – 01.06.2023
| Pasquarelli Auto S.p.A. (“Pasquarelli Auto”, “Pasquarelli” or “the Company”) is a multi-brand car dealer established in 1986 by Giancarlo Pasquarelli in San Salvo (CH), Abruzzo. After the first showroom was initially opened, the dedication and experience gained in the automotive industry over the years enabled the Company to gradually enter into multiple dealer agreements with the main automotive brands, including Audi, Volkswagen, Volkswagen Commercial Vehicles, Seat, Cupra, Toyota, Lexus, DS Automobiles, Peugeot, Kia Motors, Nissan, Mitsubishi and, starting September 2023, also Citroen and Opel. Today, the company has a widespread presence throughout Abruzzo and Molise, with nine sales centres (starting in April, with the opening of the new dealership in Rome, the sales centres will be ten), with an average size of 8,400 sqm, and a logistics centre of over 22,000 sqm for storing vehicles. The Company operates in the automotive market, recognised as one of the most important industrial sectors in the world based on turnover and companies as well as institutions involved throughout the entire production process. Indeed, for more than 125 years, the automotive industry has played a fundamental role in the economic and commercial growth of many countries, driving the development of many other sectors and creating both direct and indirect employment. Due to the characteristics described above, it is one of the manufacturing activities with one of the highest levels of concentration. Indeed, there is a limited number of companies that manufacture vehicles that hold a significant share of the market and production. We conducted the valuation of Pasquarelli Auto equity value using the DCF method and the multiples of a sample comparable companies. The equity value using DCF method (which in the calculation of the WACC includes a specific risk of 1,5%) is equal to € 133.3 million, while using market multiples the equity value is € 127.7 million. Therefore, the average equity value is equal to € 130.5 million; the target price is € 5.25, BUY rating and MEDIUM risk. |