Renta 4 | Talgo (TLGO) has informed the National Securities Market Commission (CNMV) that it has been awarded a contract in Sweden for the supply of 10 locomotives, 9 daytime trainsets and 11 night-time trainsets, as well as their maintenance for 10 years.
Under the terms of this contract, the client has the option to extend the initial order by requesting the supply of 9 additional locomotives, 7 additional daytime trainsets and 11 additional night-time trainsets, and to extend the maintenance period by two years.
Assessment:Positive news. The award raises the order book to historic levels of over €6.5 billion, with the contract value representing around 10% of Talgo’s order book.
Uncertainty regarding the ability to deliver the contract on time and in full; we await the company’s announcement of a new strategic plan to address these concerns,
We maintain our Overweight recommendation with a Target Price of €3.50 per share.
