Renfe’s contract: we fine tune our target price up to €5.91 from €5.88
Spain’s Renfe order for an additional 15 very high speed (VHS) trains from Talgo at lower than expected pricing prompts us to revise down our estimates. A shorter time to delivery partly compensates this erosion on the valuation.
We are lowering the WACC from 7.5% to 7.1% to incorporate an improved visibility for collections from the Saudi contract. This adds +€0.43 to our €5.88 target price. Our revised valuation of the Renfe contract cuts –€0.50 from the target price and the share buy-back programme adds +€0.10. As a result of these adjustments, our revised target price increases from €5.88 to €5.91.
Our Buy recommendation remains unchanged.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.