Company Announcements

Classification of NuWays AG to Borussia Dortmund GmbH & Co KGaA

Company Name:	Borussia Dortmund GmbH & Co KGaA
ISIN:	DE0005493092
Reason for the research:	Update
Recommendation:	Buy
Target price:	EUR 5.50
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

UCL draw: 2 spanish giants but overall feasible opponents

Topic: Last week Thursday, the draw for the league phase of the UEFA Champions League (UCL) took place in Monaco. In the newly formatted UCL, BVB will face last seasons final opponent Real Madrid (Away), FC Barcelona (Home), Shakhtar Donetsk (H), Club Brugge (A), Celtic Glasgow (H), Dinamo Zagreb (A), Sturm Graz (H) and Bologna FC (A). Here is our view.

While BVB is seen to be the clear underdog in the away game at Madrid, which has further strengthened its squad during the summer by adding French superstar Kylian Mbappé, and the home game against Barcelona to be a duel at eye level, the other six opponents are expected to be weaker. Especially the games against Graz, Zagreb, Donetsk, Brugge and Glasgow should result in wins, as none of these teams provide even half of BVB’s squad value according to transfermarkt.de. On paper, the away game at Bologna could serve as another challenge, but the Italian side lost some key figures from last season with head coach Motta, striker Zirkzee and centre back Calafiori. Conservatively estimating 15 points out of the 8 matches, BVB could possibly make it directly into the round of 16, according to simulations conducted by Football Meets Data.

Mind you, the UCL will be played under a new format this season with the number of participants increasing from 32 to 36 (Update on prize money details). Moreover, there will be no groups anymore, instead all teams will be ranked on one table. At the end of the league phase, the top 8 teams move directly into the round of 16, while the teams ranked 9-24 will play out the remaining participants in an intermediate round. In our model, we conservatively expect BVB to reach the round of 16, every progress beyond that is hence providing upside to our estimates.

Besides this, BVB had a sound start to the new Bundesliga season. After winning the first game against a highly talented Frankfurt squad, BVB got another point this weekend at Bremen thanks to a 0-0 draw.

Overall, the team should be equipped to land another top 4 spot at the end of the season to qualify for the UCL again. Also, another deep run in the UCL is possible, especially if the team manages to finish top 8 in the league phase.

Reiterate BUY with an unchanged € 5.50 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/30679.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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