We will publish a flash note on Kinepolis later today. Following the release of better-than-expected FY11 results, we upped our adjusted EPS forecasts by 11% for 2012 and 2013. As a result, we keep our Buy rating and upgrade our target price based on a SOTP valuation from € 74 to € 80. This implies 18% upside potential versus the current price level.
Our investment case remains unchanged. We like this stock for i) its growth path in a mature sector, ii) structurally improving profitability, iii) its discount versus peers while it deserves a premium, iv) solid balance sheet and room for further optimization, v) the ~10% FCF yield and vi) the valuable real estate portfolio, much of which is currently unused and due for redevelopment.