Ipopema has a price target of 0.322 lei for Impact shares, with more than 30% compared to the market quote

Analysts at Ipopema Securities have a target price of 0.322 lei for Impact Developer & Contractor (IMP) shares over the next twelve months, with a "Buy" recommendation, according to the company's latest report published on the BVB Research Hub.website.

It is a price 36% higher than the one in the market on Friday at 12:00, of 0.236 lei, but similar to the one in the previous report, from the end of August.

In the middle of last week, Impact published its results for the third quarter of the year. The company achieved revenues of 47.5 million lei (down by 28% in annual dynamics, but up by 26.4% in quarterly dynamics) and a net profit of 29.3 million lei, with a margin of 61, 8%, results that Ipopema characterizes as "decent".

"We continue to monitor how the company adjusts to the high costs of construction materials and labor," the report said.

As of September 30, Impact had 381 contracts pre-sold or reserved, worth a total of euro43.2 million, which should translate into sales as the apartments will be completed in the coming period. At mid-year, Impact had 403 such contracts, worth a total of 46.2 million euros, the report said. According to the document, as of September 30, Impact had 2,693 units under construction (with authorization), and of the 954 recently completed homes, 72% have already been contracted.

In the third quarter, Impact maintained a solid gross margin of 30.3% (31.6% in the second quarter) as construction material and labor costs moderated. The company reported a gross profit of 14.4 million lei (down 31.9% in annual dynamics and 21.1% in quarterly dynamics).

In the first nine months, Imapct achieved revenues of 106.8 million lei (down 31.6% in annual dynamics) and a gross profit of 32.7 million (-41.8%). The operating result (EBIT) was 65.8 million lei (+178% in annual dynamics), including due to the gain from real estate investments, of 44.6 million lei in the second quarter, which helped to increase the operating profit and, implicitly, of the net, which amounted to 63.6 million lei (+326% in annual dynamics), according to the document.

"Impact has several ongoing projects. Sales of completed homes in Luxuria Residence, Greenfield Băneasa and Boreal Plus will continue. Also, the commissioning of 732 apartments in Greenfield Băneasa (Teilor Project) is coming," the report states.

Impact focuses its activities on the Bucharest metropolitan area, the best performing region of the country, the economy of the Bucharest metropolitan area is growing and generates 26% of Romania's GDP. Impact develops large residential complexes, both for the population segment with medium and high incomes. These housing concepts will be replicated in other large cities in Romania, the Impact report also states. Ipopema Securities initiated coverage of Impact shares in March 2021, using the discounted cash flow method as the main valuation method.