The average target price of SELEC.IS is 74 and suggests 19% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 85.5. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 65.4. This is equivalent to 28% downside potential in the worst case. 

Selçuk Ecza Deposu Ticaret ve Sanayi A.S. operates as a distribution channel between pharmaceutical manufacturers, hospitals, and pharmacies. It also operates a pharmaceutical warehouse. The company was founded in 1958 and is headquartered in Istanbul, Turkey. Selçuk Ecza Deposu Ticaret ve Sanayi A.S. is a subsidiary of Selçuk Ecza Holding A.S.

Turkey

Selçuk Ecza Deposu Ticaret ve Sanayi A.S.

Healthcare

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. 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. 

SELEC.IS reported revenue of TRY 121 356mn in the last 12 months, up 24% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 794% from FY23 to TRY 3.22. Market expects EPS to reach TRY 3.44 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 12ppts over past six months and grown 18ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 4.9% in the last 12 months, up from 2.4% in FY23. 

Historically, SELEC.IS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.6%, a growth from 0.2% in FY23. 

Selçuk Ecza Deposu Ticaret ve Sanayi A.S. reported a return on equity (RoE) of 10.4% in the last 12 months, up from 2.1% in FY23. The market consensus projects an RoE of 0.9% in FY24, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 9.9%, above the peers. The consensus estimate for FY24 for RoCE is 7.1%, however, this time below its peers. 

Another important profitability metric, return on assets (RoA), amounted to 3.5% in the last 12 months, an increase from 0.7% in FY23. The market analysts predict that RoA will be 0.3% in FY24, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.2 in the past several years. This ratio implies a excellent 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.

SELEC.IS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and is somewhat unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

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, and poor working capital management. We note resilient historical revenue growth, low margin volatility, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, SELEC.IS is not overly volatile. In other words, the stock will fall less than 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 low. 

In normal market circumstances, SELEC.IS is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited 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/EBITD. 

Selçuk Ecza Deposu Ticaret ve Sanayi A.S.

TRY 91.25

5

Selçuk Ecza Deposu Ticaret ve Sanayi A.S.

TRY 91.25

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

TRY 91.25

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