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STAR companies: threats and opportunities in 2023 and 2024

Alberto Francese, Head of Corporate Broking Research Intesa Sanpaolo
07.04.2023
fruition time: 6 min

INSIGHTS - ECONOMIND

STAR companies: threats and opportunities in 2023 and 2024

STAR companies: threats and opportunities in 2023 and 2024

02:44

In 2022, the aggregate revenue of STAR companies grew by about 14%, despite the "perfect storm" produced by the combined effect of rising commodity prices, supply chain inefficiencies, and the energy crisis in an unstable geopolitical scenario. EBITDA margin has shrunk by about 100 basis points compared to estimates at the beginning of 2022.

2023 will be characterized by a slowdown in demand, still high commodity prices, but improvement in the supply chain. This scenario, in our view, is not yet reflected in the 2023 consensus estimates of STAR companies, which see aggregate revenues growth of about 6% and margin expansion of 50 basis points.

2024 is expected to be the "return to normal" year, with aggregate revenues estimated to grow by about 5% and margin expansion of about 30 basis points.

In a scenario in which 2023 aggregate revenues would remain flat compared to 2022, a rather limited downside risk to the STAR index price, about 10%, would emerge. We also simulated a more conservative scenario, in which 2023 aggregate turnover decreases by 2% compared to 2022: in this case there would be a higher downside risk to the STAR index price, around 25%, and a more limited upside potential, around 20% looking at 2024. Should such a scenario arise during the year, investors, in our view, would take a wait-and-see approach.

SOURCE Intesa Sanpaolo elaboration on FactSet data

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