Superior medium-term growth despite near-term noise
– Now guides for high (vs mid before) single-digit FY26 organic EBITDA growth, as energy is less of an issue in key regions
– 2029 EBITDA still seen at €0.9bn (11% 2026-29 CAGR), but €0.8bn in unused firepower provides free optionality for further expansion
-Buy, PT raised to €62: Attractive valuation (6x 2027e EBITDA), elite 15% ROIC and premium earnings profile to fuel further re-rating
Defying headwinds and scaling heights. Upon the release of its 1Q26 results, Titan
unexpectedly upgraded guidance to mid/high single-digit organic sales and EBITDA growth, backed by an outlook heavily insulated from global energy volatility. Notably, c75% of total EBITDA is structurally shielded via gas-heavy US operations and a >50% alternative fuel substitution rate in the Balkans, rendering localized power spikes in Greece mathematically immaterial since standalone electricity represents a mere 6% of the group cost base. Also driven by efficient cost-control and recent inorganic expansion, we project FY26 EBITDA/net profit to reach €694/348m (+15%/21% y-o-y). This strong profitability trajectory firmly underpins Titan’s sector-leading growth profile, characterized by a premium 11% (vs the 9% peers weighted average) 2026–29e EBITDA CAGR and an elite c15% ROIC, 650bps >WACC.
Advancing towards medium-term goals. Despite global uncertainty, Titan remains on track to achieve its €1bn 2029 EBITDA target. While our base organic forecast stands at €0.9bn, deploying the group’s €0.8bn remaining M&A firepower should yield an incremental c€100m. Even with heavy M&A activity, leverage will remain in check at 1.1x by 2029, well below the 1.5x–2x ceiling, on strong FCF. In turn, we see 2029 EPS at €5.4/sh (10% CAGR); admittedly 11% down our previous call on elevated M&A financials, but within Titan’s €5–6/sh target.
Growth engines firing across regions. As energy costs are less of an issue in key areas, Titan is poised for cross-regional outperformance across the cycle. Notably, we project a 9% US EBITDA CAGR (2026–29e), on robust non-residential demand and infrastructure spending, alongside resilient pricing. Concurrently, Greece (14% CAGR) and the Balkans (7%) are set to benefit from strong infrastructure activity, while the East Med (21%) rebounds on private projects and strong export activity. While we have lowered our 2026 EBITDA estimates by 3% to reflect macro headwinds, accelerated M&A and disciplined cost-control initiatives effectively offset this near-term pressure, keeping our medium-term estimates intact.
Buy with a higher €62 (from €59) PT: In a nutshell, we see meaningful re-rating potential, on strong organic growth, free optionality for bolt-on M&A and compelling valuation (trading at an unjustified 32%/48% discount to EU/US peers in terms of 2027 EV/EBITDA). Crucially, at current prices US/non-US ops are implicitly valued at just c7x/5x 2027 EBITDA. As always, our PT is derived from a blended approach: a) a 3-stage DCF assuming 1% LTG and an 8.5% WACC (€59.7/sh, 50% weight) and b) a SOTP analysis (€64.4/sh 50% weight), applying
unchanged 10x/6x 2027e EV/EBITDA multiples for US/non-US ops. Even at our PT, Titan trades at 7.5x 2027e EBITDA, implying a reasonable 15%/37% discount to EU and US peers.
