Topline Securities has published a new research report on Pak Electron Limited (PAEL). The research firm has upgraded the Dec 2025 PAEL target price on the stock to Rs. 58 based on improved profitability and upward revision of earnings.
The financial performance analysis of Pak Elektron Limited (PAEL) looks quite fruitful due to the overall enhancement in profitability margins, sound sales expectations, and the preferable controlling of the selected measures of debts.
Total net sales are expected to be PKR 50.7 billion in 2024, and it is expected to increase to PKR 69.9 billion in 2025 with a growth rate of 38 %. Gross margins are expected to reach 26.5% in 2025 due to the stability of exchanges and deflation.
Also, total loans have decreased from PKR 22.8 billion in December 2022 to PKR 16.1 billion in September 2024, and together with decreasing interest rates it will increase the profitability of the company.
The EPS will be settled to PKR 2.68 in 2024 and will enhance to PKR 5.90 in 2025 on a 120% year on year ascension and to PKR 6.99 in 2026.
On the valuation front, the price-earnings ratio is expected to fall from 15.5x for 2024 to 7.1x for 2025 and 6.0x for 2026 pointing to higher value attractiveness. If the improved earnings materialize, the stock will eventually have to re-rate, which should bring capital gains for investors.
ROE is predicted to increase from a mere 5% by the end of 2024 to 10% in 2025 and 11% in 2026. However, the company’s dividend yield of 4% is anticipated through 2026 with a payment of PKR 1.50 per share.
Apart from Topline Securities, Sherman Securities also has a PAEL target price of Rs. 55 on the stock.
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