Saudi Arabia will extend its very-high-speed trains supply contract with Talgo

Talgo

Renta 4 | Saudi Arabia will extend the contract it has with Talgo for the supply of very-high-speed trains, according to press reports.

The possible new contract would cover the supply of 20 new very-high-speed trains for an amount close to 800 million euros.

Valuation:

If this news is confirmed, we would value it very positively. The amount of the contract would double the firm’s current manufacturing portfolio of around725 million euros, 28% of the group’s total portfolio.

And good news given that it would secure the workload of the group for the coming years, along with the contract in Germany. In addition it would generate strong growth in sales.

We reiterate our Overweight recommendation and Target Price of 5 euros/share.

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