Sunday, January 16

Cellnex: End of the bearish trend?

The Spanish company of telecommunications towers Cellnex made a maximum on August 23, when it touched 61.08 euros. Although, since then it has started a serious correction that has placed it at levels of 52.66 euros.

But this profit-taking period could be coming to an end, according to Renta 4 analyst Eduardo Faus Ipiña, who has Cellnex as a recommendation to buy.

“The price accumulates since October several weeks resting in the area of ​​50 euros, where it has been forming a support between that level and 53 euros, an area of ​​previous resistance from July to November 2020,” Faus wrote in a recently published note.

“In the short term, it breaks the passage of the bearish guideline from the historical highs of last August, favoring a completion of the corrective process since then.”

Above, Cellnex shares have strong resistance around 55 euros (specifically, 54.85 euros).

This Thursday, Cellnex’s share rose 0.5 percent and stood at levels of 52.50 euros.

The consensus is very positive with the action of Cellnex

However, Renta 4 is not the only investment company that has Cellenex on a purchase recommendation. In fact, the Bloomberg analyst consensus is very positive with the telecommunications tower company.

Specifically, 84.4 percent of analysts recommend buying the security (27 analysts); while 9.4 percent of the experts advise keeping the company’s securities in the portfolio (3 analysts) and only 6.3 percent choose to sell (2 analysts).

Regarding the target price, analysts place it at 65.02 euros at twelve months, well above Cellnex’s current levels of 52.48 euros, which gives it an additional potential of 23.9 percent.

Bank of America also recommends buying Cellnex

Among the houses that are positive with Cellnex, Bank of America (BOFA) stands out.

The US investment bank recently expressed its good opinion of the Spanish telecommunications tower company in a report.

In the document signed by BOFA, the US investment bank asserts that it has Cellnex as a purchase recommendation (along with other securities in the telecommunications sector such as Telefónica, also Spanish).

Likewise, the target price has been raised from 63 to 64 euros.

One of the reasons that Bank of America is optimistic about the action is the corporate operations in which Cellnex could be involved in the future.

Bearish and bullish factors weighing on the Cellnex price

In any case, the investment bank recognizes in its note that there are a number of factors that could cause the price to be above or below its target level.

Among the catalysts that could drive Cellnex’s action beyond those levels would be stronger-than-expected growth in telecommunications tower tenants, the resilience of transmission and emergency services, an increase in revenues thanks to 5G or a better execution than expected, so that Cellnex becomes a major European player in the telecommunications networks sector.

On the opposite side, the risks that could cause Cellnex’s price to fall below the target of 64 euros set by Bank of America within the next 12 months would be losses from contracts with a significant impact on ebitda, a drop in revenues. due to installation, inability to negotiate rents, failure to close corporate operations or difficulties in obtaining more facilities.