OCI N.V. (OCI.AS), mcap=€6.6bn, price €30.34 vs €34.78

– Fertilizer companies are currently overearning.
– Assuming a return to equilibrium, OCI is the most attractive major producer taking into account capital structure and normalized earnings profiles.
– Set to earn 50% of its mcap in FCF over the next 7 quarters.
– At 4x fwd EBITDA trades below historical multiples and peers on normalized earnings.

– Projected FCF of $4bn will reduce EV to $5.5bn till the end of ’23.
– With normalized earnings of $1.4bn, OCI would be trading at a 4x multiple.
– Historically traded at 7x fwd EBITDA with far higher leverage.
– Peer CF sits around 8x-9x. Using 7x multiple, EUR 54/share target

Exp. gain: +55% to EUR 54/share.

Full OCI.AS write-up (free guest account required): https://www.valueinvestorsclub.com/idea/OCI_N.V./3868356256

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