Berenberg calls Dalata 'significantly undervalued'

Berenberg praised Dalata for delivering "a robust set of 2019 results", with revenues rising by roughly 9% and underlying earnings growing by 13%.

The German bank also highlighted that as the company faced "challenging market conditions in every region", its figures provided "a clear demonstration of its resilience".

"This gives us increasing confidence that the business in Dublin will remain very profitable over the coming years and that the UK pipeline, which is set to contribute materially in the medium term, will prove to be highly successful," said Berenberg, which stood by its 'buy' rating on Dalata's shares.

Moreover, Berenberg said Dalata was generating "substantial" normalised free-cash flow, providing balance sheet capacity for expansion opportunities.

"Dalata has achieved significant normalised FCF (pre-development capex) growth in recent years and generated more than €100m for the first time in 2019.

"We expect this will remain at a similar level in future years, providing plenty of capacity to invest in expansion. Due to higher development capex, overall FCF will be more modest in 2020 and 2021 than it was last year, but it will subsequently rise substantially."

While the analysts reduced their price target, they said they continue to believe the stock is" significantly undervalued" at its current level.