Tag: buy recommendation

1 January 2018 – La Vanguardia

The market capitalisation of Spain’s property developers will exceed €6.5 billion in 2018, after a year of recovery in a sector whose activity was “almost paralysed” following the burst of the real estate bubble, according to forecasts from investors and financial analysts shared with Europa Press.

Analysts consider that the two large property developers that began their stock market lives in 2017, Neinor and Aedas Homes, will consolidate their businesses this year. Moreover, Metrovacesa and Vía Célere will make their stock market debuts, and Aelca may debut too.

The current market capitalisation of the property developers that have listed on the market exceeds €3 billion. With the new joiners, the financial analysts expect that figure to more than double in 2018, to reach €6.5 billion.

In terms of the debutants expected in 2018, Metrovacesa, which wants to be the first to make the leap onto the stock market, will do so as a “completely transformed” company. In this way, the analysts agree that it will likely be the largest stock market debut of the year and will become the largest listed property developer, with a portfolio worth €2.6 billion.

Moreover, the analysts state that Neinor and Aedas Homes have upside potential of around 20% and solid shareholders, and so they present them as “clear buy recommendations”, whereby reinforcing the strength of the sector. The experts also highlight that both companies represent “an opportunity” to join the first stages of recovery of the Spanish real estate market, an assessment that will be extended to the new companies that plan to make their stock market debuts this year.

Specifically, the analysts highlight the quality of Aedas Homes’ land portfolio, which has potential for the construction more than 13,000 homes and which is located in the provinces that have seen the greatest recovery in the real estate market and a positive evolution in terms of prices (Madrid and Barcelona, according to the most recent report from Tinsa).

On the other hand, Neinor stands out due to the “discipline” of its balance sheet, which has meant that the company is in a strong position to purchase plots of land with attractive margins. Moreover, its EBITDA is expected to grow from €19 million in 2016 to €320 million in 2021.

Original story: La Vanguardia

Translation: Carmel Drake