ACS: ADDITIONAL UPSIDE (ANÃLISIS BANCO SABADELL)
Additional upside. BUY.We cut our estimates due to Covid-19 and thus, in a scenario of V-shaped recovery, we cut Net Profit’20e by -56% (-50% vs. 2019; -52% consensus) and by -7% on average for the 2021-22 period, which means a CAGR’19-22e of -5% (-8% in a scenario of U-shaped recovery), not returning to 2019 levels until 2024. Based on this scenario, we set a T.P. of € 29.19/sh. (-27% vs. previously; € 25.80/sh. in a scenario of U-shaped recovery), which means an EV/EBITDA ratio’21e of 5.7x (3.8x ex factoring, with minority items at BV vs. historical average of 5.7x) and a P/E’21e of 11.0x (vs. historical average of 11.8x). Despite having beaten the IBEX 35 by +9% from the index highs on 19 Feb, the upside potential is +24% (+10% in a scenario of U-shaped recovery) and therefore, we maintain our BUY recommendation.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
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