Wood&Co. issues buy recommendation for Romanian industrial group TeraPlast

Prague-based brokerage company Wood & Company issued a "buy" recommendation for the shares of Romanian construction materials producer TeraPlast Bistrita (TRP).

Wood analysts also increased the 12-month target price for the TeraPlast shares to RON 0.462 (18.5% above current market price), from RON 0.437 in July, Ziarul Financiar reported.

The brokerage company published its updated report on September 23, two days after FTSE Russell included TeraPlast in the FTSE Total Cap and Micro Cap indices.

Since July, when Wood issued its previous report for the company, the TRP shares rose by 56.4%.

In the meantime, the company announced the sale of the steel division, which brought almost half of its EBITDA in 2019.

"We have increased the estimates and maintained 'buy' recommendations for TeraPlast with a target price higher than RON 0.462per share. Following the successful closing of the steel division sale, which we estimate will take place in Q4 this year, we expect TeraPlast to be in a net cash position, consolidating its balance sheet after a period of leverage around 2.1 - 2.9x in recent years," the report reads.

TeraPlast currently has a market capitalization of RON 680 mln (EUR 139 mln).

(Photo courtesy of the company)