S&P cuts Grifols rating, while Fitch, Moody’s leave unchanged; the company reaffirms business plan

GrifolsGrifols gearing could drop to 4.9x in 2023, 3.8x in 2024

Bankinter | S&P has cut Grifols debt rating, while Moody’s and Fitch leave theirs unchanged. The board issues a statement reaffirming business plan.

The updated ratings are: S&P B+ (previous BB-); Moody’s B1; Fitch BB-. S&P highlights that the process of debt reduction could go slower than forecast amid difficult market conditions. It has maintained its outlook at Neutral. Both Moody’s and Fitch flag Grifols’ market positioning, its integrated business model, the strength of demand and the expansion and the diversification of the plasma supplies. Then there is the increase in collections (up 26% in 2022), the possibility of operational improvements and, amongst other things, the generation of free cash flow which contributes to cutting debt. In a statement issued this morning, the board has reaffirmed its business plan. It also announced that it expects sales to grow c. +10% in H12022 and that it will start again to publish quarterly results.

Bankinter analyst team’s view:

The cut in ratings by S&P is negative news. In the last three sessions the stock price has lost 15%. We believe this is the reason behind the company’s statement today which is positive.

GRIFOLS (Neutral, Target Price 15,00 euros/share).

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