LapWall - Surprising guidance revision
LapWall revised its 2024 financial guidance range yesterday, the positive update in terms of profitability guidance eases the short-term uncertainty. The updated net sales forecast matches our current estimate, while the EBITA guidance is significantly higher than we had anticipated.
- Revised guidance for 2024: net sales EUR 43-44.5m, EBITA EUR 4.9-5.2m. Previous guidance: net sales EUR 43-48m, EBITA 4.3-4.8m.
- Our current estimate for the company’s 2024E net sales is EUR 43.7m, in line with the revised guidance middle.
- In our latest report, we estimated EBITA of EUR 4.4m for 2024E, significantly below the revised guidance middle of EUR 5.1m.
- The company did not provide extensive description of the drivers behind the guidance revision yet informed that the update was done due to the improved profitability of its operations.
- As net sales guidance aligns with the lower end of the earlier forecast, the increase in profitability is not attributed to higher-than-anticipated volumes. We will wait for the Q3 business review to get more insights into the factors driving improved profitability.
- Given the updated guidance range for EBITA and the share price reaction, LapWall is priced at roughly 11-10x EV/EBITA for 2024E, still notably lower compared to our peer group consisting of European small and mid-cap building material companies.
- We will adjust our estimates to match the Q3 figures and updated guidance in our company update following LapWall’s business review that will be released next Tuesday, 29th of October.