The average target price of VESBE.IS is 26 and suggests 102% 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 26.4. This translates into 107% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 22.4. This suggests 75% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Vestel Beyaz Esya Sanayi ve Ticaret A.S. manufactures electronics and household appliances in Turkey, Europe, and internationally. The company produces refrigerators, room air conditioning units, washing machines, cookers, dishwashers, water heaters, ovens, freezers, and dryers. It also exports its products to 157 countries. The company was incorporated in 1997 and is headquartered in Istanbul, Turkey. Vestel Beyaz Esya Sanayi ve Ticaret A.S. is a subsidiary of Vestel Elektronik Sanayi ve Ticaret A.S.

Turkey

Vestel Beyaz Esya Sanayi ve Ticaret A.S.

Consumer Cyclical

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, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. On average, the company pays dividends annually. 

VESBE.IS reported revenue of TRY 71 304mn in the last 12 months, up 17% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 97% from FY23 to TRY 0.10. Market expects EPS to reach TRY 0.43 in FY25.

The stock has been falling steadily in the past six months, losing 26% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 19ppts in total. 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 slightly negative.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 10.5% in the last 12 months, a decline from 16.1% in FY23. 

Historically, VESBE.IS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 0.2%, down from 7.8% in FY23. 

Vestel Beyaz Esya Sanayi ve Ticaret A.S. reported a return on equity (RoE) of 0.6% in the last 12 months, down from 34.1% in FY23. The market consensus projects an RoE of 2.3% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 0.3% in the last 12 months, a decrease from 12.5% in FY23. The market analysts predict that RoA will be 0.9% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 0.5%, below the peers. The consensus estimate for FY24 for RoCE is 3.2%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 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.

VESBE.IS has average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains 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 and we point to weak positions in its industry, poor working capital management. We note resilient historical revenue growth, solid return on capital, strong debt servicing capacity, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, VESBE.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, VESBE.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 low to minimal. We would also like to highlight the minimal intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. Specifically, the stock is fairly valued on P/E, undervalued on EV/EBITDA, reasonably priced on P/FCF. 

Vestel Beyaz Esya Sanayi ve Ticaret A.S.

TRY 13.03

4

Vestel Beyaz Esya Sanayi ve Ticaret A.S.

TRY 13.03

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

TRY 13.03

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