The shares of Cie Automotive rose more than 12 percent in November and are the ones with the best performance in the month of the entire IBEX 35, doubling Telefónica’s 6 percent.
The analysts consulted by Finanzas.com explain that the company is in the best market moment since March 2020, after having recovered the benefits prior to the pandemic.
In a very difficult market environment, the company far exceeded market expectations with results that have catapulted value in November.
In addition, it has also benefited from the correction in aluminum prices, a basic component in its production processes, sources point out to explain the group’s upward trajectory.
The fall in aluminum favors Cie Automotive
The structural component of cars is aluminum, which makes Cie Automotive be a key company for the sector. Among its clients are companies such as Tesla and other big manufacturers.
Aluminum peaked at $ 3,200 but has corrected to $ 2,600. Lower aluminum prices “are favoring Cie Automotive’s business,” he said. Darío García, XTB analyst.
For this reason, the group’s variable costs are decreasing, which is boosting stocks so that the company “does a good business,” he added. Garcia.
The outlook for electric cars, which weighed on Cie Automotive and Gestamp in the summer, also improved slightly, which helped the price. Aluminum is a fundamental component for battery containers.
The local approach mitigates the impact on the value chain
With these projections, the company kept its business guidelines intact, with an EBITDA margin that will grow 17.5 percent this year, in line with market expectations.
The group made it clear that the problems related to the shortage of microchips in the industry will be limited to the second half of 2021.
In addition, he reiterated that their local approach mitigates the impact of disruptions in the value chain, while the transmission mechanism of raw material prices “immunizes them to a certain extent against the inflationary scenario,” they explain in Sabadell Bank.
Bullish potential that borders on the double digits
Bounce off Cie Automotive in November it placed the group at 26.5 euros, prices that show a potential upside of 9.5 percent, according to the consensus of analysts at Finanzas.com.
Much more optimistic in the valuation was Álvaro Arístegui, Analist of Rent 4 Bank. The 33 euros it calculates as the target price for Cie Automotive they represent a margin of rise of 25 percent.
“The current price of the share does not reflect the value of the company, which continues to show the resilience of its results, the result of a solid business model,” said this expert.
In the same line, Garcia He recalled that “expectations are placed on Cie Automotive maintaining its capacity, customers and business” in the industry.
All-time highs on target
Now, the price is attacking in the short term “the resistance zone at 26.5 euros, which precedes the historical highs of the price at 30.2 euros” on the chart with discounted dividends, he said. Eduardo Faus, Renta 4 Banco analyst.
“The moment since March 2020 places Cie Automotive among the three best stocks on the IBEX 35, despite not being at all-time highs yet ”, said this expert.
All in all, the current levels at 26.4 euros are a strong resistance, which “has slowed recoveries on several occasions over the last five years,” he said. Jose Luis Herrera, Analyst at Global Investment Bank (BIG).
The route to the historical maximums passes “by first exceeding 28 euros per share, which is within the possibilities, to then look for 32 euros”, he recalled Garcia. A rebound to this area would be an additional 21 percent rise.
As an aspect to watch, Cie Automotive has appeared several times in the analysts’ pools to abandon the IBEX 35, as explained by finance.com at the beginning of the summer. The group was very fair in volume traded.