European sum-of-the-parts unlock

Upcoming IPO will crystallize significant SoTP value

Hello, Ultimate Value readers!

I’m back with a new idea today.

This setup is an attractive one: a dirt-cheap (~7x 2026 FCF) European stock with the upcoming IPO of its most valuable business. I estimate that this business alone could be worth more than 60% of the current market cap. There are also significant tailwinds for the remainco, which I expect to generate record earnings this year.

With the IPO just a few months away, I see a chance for ~60% upside from the current price, accompanied by limited downside risk, given the low starting valuation and a healthy shareholder yield.

You can size this one up, as the stock has decent liquidity, with an average daily trading volume (ADTV) of approximately USD 7 million.

Let’s take a look.