Zalaris reported strong Q2 figures, which added confidence to our margin expansion view. Management also gave a positive outlook statement and Zalaris is on track to deliver on its 10% adj. EBIT margin target, already achieving a 5% FCF yield (incl. leases) in 2020 despite modelling negative FCF in H2 due to WC. We lift our target price to NOK 61 based on revised estimates and lower NIBD, but emphasize further upside as we currently model 8% FCF yield in 2022.
19 Aug 2020
Q2: Showing some strength and further upside
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Q2: Showing some strength and further upside
Zalaris reported strong Q2 figures, which added confidence to our margin expansion view. Management also gave a positive outlook statement and Zalaris is on track to deliver on its 10% adj. EBIT margin target, already achieving a 5% FCF yield (incl. leases) in 2020 despite modelling negative FCF in H2 due to WC. We lift our target price to NOK 61 based on revised estimates and lower NIBD, but emphasize further upside as we currently model 8% FCF yield in 2022.