The selling pressure regarding ACS, Actividades de Construcción y Servicios, S.A. shares could subside shortly. In fact, the support area that is currently being tested around 37.13 EUR has come into play and could, at least in the short term, keep the downside pressure at bay.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● The company presents an interesting fundamental situation from a short-term investment perspective.
● According to Refinitiv, the company's ESG score for its industry is good.
Strengths
● The company shows low valuation levels, with an enterprise value at 0.28 times its sales.
● The company has a low valuation given the cash flows generated by its activity.
● The company is one of the best yield companies with high dividend expectations.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● With relatively low growth outlooks, the group is not among those with the highest revenue growth potential.
● The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.
● As a percentage of sales and without taking into account depreciation and amortization, the company has relatively low margins.
● The company has insufficient levels of profitability.
● The average consensus view of analysts covering the stock has deteriorated over the past four months.
● Over the past twelve months, analysts' consensus has been significantly revised downwards.
ACS, Actividades de Construcción y Servicios, S.A. is one of Spain's leading construction groups. Net sales break down by activity as follows:
- construction of infrastructures and buildings (93.3%): civil engineering infrastructures (primarily highways, hydraulic constructions and railroads), non-residential and residential buildings;
- services (5.4%): cleaning, waste collection and treatment. Moreover, the group offers maintenance services of urban and industrial infrastructures, port and logistical services, and also social services and personal assistance services.
- industrial services (0.5%): development, construction, installation and maintenance of distribution networks of electricity, gas and water, industrial production systems, telecommunication networks, road traffic control systems, etc.;
- other (0.8%).
Net sales are distributed geographically as follows: Spain (9.4%), the United States (56.3%), Australia (20.2%), Canada (5.3%), Germany (2.4%) and others (6.4%).