Take profits: Downgrade from Buy to Hold
Following an outstanding stock market performance, we believe that the drivers and events that have pushed Gamesa’s shares above our €21.16 target price will be exhausted as the merger is consummated in the next week and the merger dividend (a 16% yield) is paid.
We prefer to stay in the sidelines until we can meet the new management, learn about the prospects of the new company and hear the strategy that Siemens (59% ownership) and Iberdrola (8%) will implement.
We are downgrading Gamesa from Buy to Hold.
Siemens Gamesa Renewable Energy is a holding company. Through its subsidiaries, Co. is engaged in the business of renewable energy sources, primarily wind power but also including solar energy where its acts as a supplier and manufacturer of technological products, installations and services. Co. is organized along the lines of: promotion, construction and sale of wind farms, engineering, design, manufacture and sale of wind turbines, manufacture of thermic and photovoltaic solar components, promotion and sale of photovoltaic solar farms. Co. also participates in both Spanish and European working groups aimed at establishing priorities for its sector's research & development work.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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