We have a Buy stance on MTL with a June 2021 TP of PKR902/sh; we estimate a 3-year sales/EPS CAGR of 18%/20%
The key catalyst for tractor sales is the reduction of GST to 0%
We expect MTL to continue its benign payout regime (5yr average 109%); other triggers are HNML, agri package and exports
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The analyst certifies that the views expressed in the report reflect their personal views about the subject securities. He or she also certifies that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations made in this report. He or she further certifies that they do not have any beneficial holding of the specific securities that they have recommendations on in this report.
Valuation Methodology: We use multiple valuation methodologies in arriving at a Target Price including, but not limited to, Discounted Cash Flow (DCF), Dividend Discount Model (DDM) and relative multiples based valuations.
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