Friday, December 3

CAF reactivates the rebound after buying Alstom’s discards

CAF shares reactivated the rebound after marking a streak of nine falls in the last ten sessions. The purchase of divestments of Alstom the market liked, after strengthening the position of the railway group in France and Germany.

Specifically, the company acquired the production plant in Reichshoffen (France), in addition to its platforms Coradia Polyvalent and Talent3, the latter as intellectual property and currently under development in Hennigsdorf (Germany).

CAF will pay 75 million euros that will be financed mainly with debt to close an operation in which the favorite was Skoda, a circumstance that was very well received by analysts.

In addition, the reduced amount of the operation leaves open all the options for a possible takeover by Talgo, an operation that continues to be in the spotlight of the market, as has been reported by

CAF, second operator in France

This is “positive news from a strategic point of view,” he said. Cesar Sanchez-Grande, director of analysis of Renta 4 Banco.

The company consolidates its position as the second operator in the French market, preventing another competitor from entering. It is important because France is the third largest market in the world, with awards of 2,500 million euros in competitions for rolling stock.

Even bigger is the market for Germany, with annual awards of 4,000 million and an entry way for Switzerland and Austria, where the company did not have any relevant position.

Synergies with current contracts

On the other hand, the railway group “expects to obtain synergies that allow the contracts currently in the portfolio for France and Germany to be executed more profitably,” added analysts from Sabadell Bank.

Plus, there are sales synergies you can benefit from Solaris, CAF’s bus division. And as it points Sanchez-GrandeIt is also important to have an engineering team in the French market, a strategy that the company was already going to develop.

The experts consulted also valued the defensive nature of an operation that leaves aside Skoda and that will allow the Spanish manufacturer to offer a greater variety of products.

Talgo is still on CAF’s target

Likewise, with this operation CAF will expand its platforms in Europe, with which it will have more visibility in the Old continent.

According to estimate Sanchez-Grande, the transaction is also positive in an environment of cost inflation, since the Spanish manufacturer will have greater purchasing power.

On the financial side, the price barely accounts for 5.8 percent of CAF’s capitalization, with which “it has no relevant impact,” said the expert from Rent 4 Bank.

The key is that it leaves room for possible corporate operations and Talgo remains on the investors’ target.

The ebitda of the purchased companies remains to be known, but the multiples are acceptable. For example in Sabadell Bank calculated a debt / ebitda ratio of 1.5 times, compared to 1.2 times prior to the operation. And in Rent 4 Bank of 1.4 times.

Possibilities of bullish continuity

With the rebound on Thursday, CAF is consolidating through a technical flag formation “the upward stretch that took it from October 2020 to the highs of April this year,” he said. Jose Luis Herrera, Analyst at Global Investment Bank (BIG).

The price is moving above 36.5 euros after exceeding the average of 50 sessions on the daily chart, an important dynamic resistance in the very short term. The objective is to attack the 39.5 euros, and if it breaks them, “it could have possibilities of continuity upwards”, he adds. Herrera.

In weekly candles, the stochastic shows that there is still room for falls, but on the daily chart it is bouncing due to the strong accumulated oversold. Below, the closest support is at 35.15 euros.

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