Edison Investment Research Limited Mytilineos (MYTIL): The future is bright 08-Sep-2021 / 07:00 GMT/BST

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London, UK, 8 September 2021

Mytilineos (MYTIL): The future is bright

Mytilineos has been investing heavily to benefit from the energy transition (as humanity seeks to limit global warming to c 1.5°C). We estimate earnings (EBITDA) derived from energy transition activities will increase from 25% in 2020 to 60% in 2025, which will help drive EPS growth of 16% pa over the period, with Mytilineos continuing to achieve superior returns (c 11% ROCE). In our bull case, we forecast EPS increases by 185% by 2025, implying a 23% CAGR in 2020-25e. Our scenario-based analysis suggests the risk-reward balance is heavily skewed to the upside.

Our per-share valuation of EUR24.0 (c 50% above the current share price) is based on a 10-year discounted cash flow (DCF) methodology, which better reflects Mytilineos's growth prospects under the energy transition. We cross-check with a SOTP peer valuation (c EUR24/share). In addition, we formulate a bear and bull case that indicates the risk-reward balance is heavily skewed to the upside (c 20%/+130%). Click here to view the full report or here to sign up to receive research as it is published.

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September 08, 2021 02:00 ET (06:00 GMT)