Friday, December 8

Talgo awaits the takeover after the best year on the stock market in its history

Talgo shares have risen 29 percent since January, making the railway group the best year in its history since it went public in 2015.

The company has emerged very strengthened after the pandemic, thanks to the recovery of mobility, which will boost key business variables, such as sales and ebitda.

The consensus of analysts at estimates that turnover will reach 579 million euros this year, while in 2022 it will touch 600 million, compared to 487 million in 2020.

Along the same lines, ebitda will stand at 86.5 million euros next year, when in the year of the pandemic it barely reached 20 million.

These favorable prospects led to Talgo to sign the best year in its history, together with the prospects that the group will receive a takeover bid in 2022, an operation on which has been reporting in detail.

The takeover on Talgo that discounts the market

For a long time “there has been speculation with the possibility that Talgo It may be overshadowed by a competitor, but in recent days that possibility is becoming more present ”, he said. Antonio Castle, iBroker analyst.

The largest shareholder of the company, the investment fund Pegaso International, which owns 35 percent of Talgo, could be forced to sell if any of its reference participants (Trilantic, Torreal and the management team) so demanded it in the first days of 2022.

In the opinion of Cesar Sanchez-Grande, director of analysis of Renta 4 Banco, the best alternative is to become an “anchor investor” and lead the consolidation process.

“We estimate that during 2022 a process of sale of the participation of Trilantic at Talgo, which could inevitably lead to a takeover bid for the company ”, stressed this expert.

With a capitalization of 614 million euros and trading at a significant discount compared to the average target price attributed by analysts who follow the stock.

Margin of rise of 20% if the takeover bid is finalized

Talgo has a capitalization of 666 million euros and is trading at a discount of more than 8 percent compared to its target price. In addition, it is far from the 9.25 euros at which it began to trade.

For both reasons, Castle He believes that “it would not be very complicated” for Talgo to become a target for other companies in the sector, nor would it shock its shareholders “to be interested in hearing offers,” added this expert.

In a sector in which there have been some consolidation operations lately, two groups appear with many options to gain a majority of control in Talgo: the Spanish CAF and the Swiss Stadler.

In the opinion of Sanchez-Grande, “The main candidate” is CAF. The businesses are complementary and offer the greatest potential to generate synergies.

The same opinion has Antonio Castle. “CAF has significant financial potential and it would be ideal if it decided to make a move,” added this expert.

Both companies would create a national railway infrastructure group with a presence in all segments of the sector and with a global dimension.

Of course, the sources consulted do not rule out that Talgo continues alone. Due to business strength and margin recovery, it has plenty of capacity. Another thing is that the pressure of Trilantic get to the point where you are looking for a buyer.

Bounce options for Talgo

Where appropriate, Sanchez-Grande he estimates that the takeover on Talgo could be announced at a price of 6.5 euros per share. The margin of increase with respect to current market prices exceeds 20 percent.

With a premium for corporate operation of this amount, Talgo will be one of the securities to be closely watched in 2022.

After the recent rises, the price is at a high of the year above 5.3 euros and its main resistance is 6 euros, levels prior to the outbreak of the pandemic.

In the very short term, Josep Codina’s technical analysis for Talgo marks an intermediate resistance at 5.56 euros, while the support to watch is 5.05 euros, an area that right now looks distant given the solid trend bullish value.