TÉCNICAS REUNIDAS: THE MARGIN GUIDANCE STARTS TO MATERIALIZE (ANÃLISIS BANCO SABADELL)
Margin guidance being met. We raise our T.P. by +10%. BUY.We raise our T.P. to 28.68/sh. (+40% upside), which we break down as follows: (i) -+12% from the company’s better cash position’19; (ii) +3% from extrapolating the improvement seen in working capital to the medium-term and higher order intake levels in 2020; and (iii) -5% from a fiscal provision accounted in the 4Q’19 which will involve cash outflows in the short-term. The stock’s poor performance since the company reiterated its guidance of margin improvement as of the end of 2019 (-5.4% vs. IBEX) leaves TRE trading without any credibility, that is, a margin EBIT in perpetuity in line with that reported in 4Q’19 (2%) vs. levels above the guidance of 3%, in line with our estimate. +-25bps in the recurring margin means +-4.7% on our T.P. and €+-250 M of contracts annually, +-3.6%.
Tecnicas Reunidas is a general contractor company based in Spain. Co. engages in the engineering, design, and construction of industrial facilities for refining and petrochemical, oil and gas, power, and infrastructure and industries sectors worldwide. Co. constructs nuclear plants, conventional thermal plants, and renewable energy and cogeneration facilities for power sector; refineries and facilities for petrochemicals; water treatment, desalination, waste management, air, land, and marine transport facilities; and liquefaction, and storage facilities, as well as oil and gas fields and pipelines. Co. also provides engineering, management and operating services for industrial plants.
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.