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2016 Results Preview

For the year 2016e, we are expecting a +2% increase in sales and lower operating results (this is in-line with the first nine months): –18% for EBITDA and –21% for EBIT. Lower financial expenses reflecting Forex gains should see the PBT declining by only –1% and the net profit unchanged at €43mn.

Following an excellent performance in 2016, the recent share price weakness (-7.1% relative to the Ibex-35 in the last 30 days) that we believe was caused by Kutxabank scaling down its stake in CAF from 19% to 14% and Santander disposing of its entire 3% stake represents an opportunity to buy the stock.

Our Buy recommendation and target price of €39.5 are unchanged.