The average target price of KRDMD.IS is 43 and suggests 79% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 47.1. This translates into 95% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 37.7. This suggests 56% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S. produces and sells iron and steel products in Turkey. The company's products portfolio includes wire rods, railway rails and wheels, profiles, rebars, round bars, billets, equal and unequal angles, GI and TH sections for mine support, platinas, blooms, pig iron products, coke and coke related products, granule blast furnace slag, and air separation plant's products, as well as metallurgical lime. Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S. was founded in 1937 and is headquartered in Karabük, Turkey.

Turkey

Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S.

Basic Materials

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

KRDMD.IS reported revenue of TRY 53 306mn in the last 12 months, down 30% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. Market expects EPS to reach TRY -1.97 in FY25.

Over the past six months, the stock has consistently fallen, resulting in a 7% total decrease. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 2ppts and its growth decelerated by 25ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 24ppts and its growth decelerated by 22ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 2.3% in the last 12 months, up from 0.6% in FY23. 

Historically, KRDMD.IS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -5.2%, down from 2.2% in FY23. 

Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S. reported a return on equity (RoE) of -6.3% in the last 12 months, down from 6.8% in FY23. The market consensus projects an RoE of -4.1% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -3.9% in the last 12 months, a decrease from 3.8% in FY23. The market analysts predict that RoA will be -2.5% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -5.7%, below the peers. The consensus estimate for FY24 for RoCE is 2.6%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.9 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are acceptable. In combination with good business standards, shareholder rights are protected.

KRDMD.IS has above average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, and poor working capital management. We note resilient historical revenue growth, low margin volatility, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, KRDMD.IS is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, KRDMD.IS is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to average. We would also like to highlight the average intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. In particular, the stock is overpriced on P/E, of fair value on EV/EBITDA, undervalued on P/FCF. 

Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S.

TRY 24.4

4

Kardemir Karabük Demir Çelik Sanayi Ve Ticaret A.S.

TRY 24.4

4

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

TRY 24.4

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