Stern reported a 5% reduction in revenues in its Q3 trading update. Profitability lagged, especially because of COVID-19 related effects in workshop utilisation and car repair. Stern did not use the Dutch government support package NOW2 in Q3, but is considering making use of NOW3, which could have an impact on the performance for the rest of the year. We have made small downward changes to our FY20 estimates on the back of the Q3 results, but maintain our 2021 estimates as we continue to expect a recovery post COVID-19. At an FY21e P/E of 9.4x that implies a 27% discount to peers, Stern still looks undervalued.
