Eight months ago Carax-Alphavalue held the view that Gamesa was fully priced ahead of it falling into the Siemens bag. This opinion proved correct only for the following two months. Another six months on and the Spanish wind-turbine manufacturer is looking decidedly expensive at €21.5, even though they have upgraded their target price on the back of a strong 2016 delivery.
Returns in offshore wind projects have come under pressure with intense competition and aggressive assumptions. As the technology matures, Citi analysts believe falling costs should support a 7-9% project return in the long ter. The case of Gamesa.
Cellnex shares have under performed the sector by c.16% since mid -Oct 2016, mainly due to higher government bond yields and the market’s rotation out of yield stocks which, in the case of TowerCos, may have been exacerbated by their dependence on M&A.
Técnicas Reunidas has been awarded by Saudi Aramco the contract for the turnkey project Clean Fuels within the Ras Tanura refinery on the east coast of country. No financial details of the contract have been revealed, but it means a good start to the year for the company and strengthens its position in the Middle East market.
UBS | Based on our latest conversations with investors, the following three questions emerged on Iberdrola: Could we see EPS growth upgrades following the strategic update on Feb-2017? Could renewables growth plans in the US be at risk? And, Is the company likely to pursue inorganic growth as suggested by recent press articles?
Carax- Alphavalue | 2016 is no great vintage for Spanish group Ferrovial (Add, France) which spent the year sailing into headwinds including the bankruptcy of one of its US toll roads in March, Brexit in June (36% of sales are generated in the UK) and the widening of South European sovereign spreads from October.
Carax-Alphavalue | Amongst integrated oil companies, Repsol (Add, Spain) is one of the smallest with a €19bn market cap despite its latest acquisition (Talisman) doubling its size (production seen at 725kbpd by 2020 from 355kbpd in 2014).
José Benito de Vega | Gas Natural’s shares have been volatile in the last few months due to results which were worse than analysts’ consensus, coupled with a strategic plan which disappointed the market. But the stock price has recovered in the last two months and has outperformed the Ibex 35 index by 7.6% so far this year.
UBS | Santander updated the main targets of its 15-18E business plan. The new 11% Group ROTE18E figure (previous 13%) is largely aligned with our existing forecasts, to which we make modest changes.
Norbolsa | CaixaBank posted overall solid figures in the first half to 2016, particularly with regard to its net interest margin.