EDISON INVESTMENT RESEARCH LIMITED Edison Investment Research Limited: Kendrion (KENDR): Initiation - Energised by electrification

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20/04/2021 08:00

Edison Investment Research Limited
Edison Investment Research Limited: Kendrion (KENDR): Initiation - Energised by electrification

20-Apr-2021 / 07:00 GMT/BST


London, UK, 20 April 2021


Kendrion (KENDR): Initiation - Energised by electrification

Kendrion is a global player in high-quality electromagnetic systems that optimise safety, performance and comfort in automotive and industrial applications. The coronavirus pandemic creates a short-term uncertain market environment but the underlying demand for Kendrion's products is strong and it will benefit from multiple long-term disruptive trends, such as autonomous driving, electrification, emission reduction and industrial automation. Its valuation shows a discount to peers, which should gradually vanish when company targets are met.


We value Kendrion at around €28 per share, which is the average of historical multiples (€28), DCF (€29) and peer comparison (€26). Higher revenues and margins will result in higher cash flows over the next few years supporting our DCF valuation. Kendrion is valued at a discount to peers of 11% on 2022e EV/EBITDA, which might vanish over time as we believe that the company will be able to accelerate growth and significantly improve margins.

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1186349  20-Apr-2021