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Pharos Research cuts Eastern Co FV to EGP 19.8/shr

Pharos Research cuts Eastern Co FV to EGP 19.8/shr
Eastern Co’s surplus cash balance dropped by EGP 3 billion to EGP 1.78 billion
Eastern Co
EAST
-0.37% 27.00 -0.10

Cairo - Mubasher: Pharos Research has downgraded their fair value (FV) for Eastern Co’s stock to EGP 19.8 per share.

The Cairo-based research firm ascribed its decision to an increase in the profit share of the Egyptian tobacco company’s employees, coupled with a decline in cash balance.

Eastern Co’s surplus cash balance dropped by EGP 3 billion to EGP 1.78 billion, against EGP 4.8 billion in September, Pharos said in a report.

The report expected a compound annual revenue growth (CAGR) of Egypt's monopoly cigarette maker to hit 3% in the five-year period ended 2023, with a gross profit margin of 36%.

Eastern Co last reported a 5% year-on-year decline in its net profits during the first quarter of fiscal year 2018/2019.

From June to September, the Egyptian tobacco firm posted a net profit of EGP 991.18 million, compared to EGP 1.04 billion in the same period last year.

The company’s revenues rose to EGP 3.3 billion in the three-month period ended September, compared to EGP 3.17 billion in the comparable quarter of 2017.