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Mar 13 2018, 11:25 GMT
Applegreen enters FY2018 in excellent shape, delivering 23% constant currency EBITDA growth in H2 2017. The stand-out positive, in our view, was FY2017 operating cash conversion at 202%, resulting in year-end net debt/EBITDA of just 0.3x. We will likely leave our earnings forecasts broadly unchanged at this early stage in the year. Our positive investment thesis is predicated on the view that Applegreen has the ambition, opportunity set and balance sheet to materially scale the business over the medium term. The stock is trading on 22x 2018 P/E. We reiterate our ‘Outperform’ rating and €7.20 price target, c.30% upside.