On the Heavyweight Demolition Price of the Ibex 35

On the Heavyweight Demolition Price of the Ibex 35

Only three IBEX 35 values ​​reached a market capitalization of 100,000 million euros at some point in their stock market history. The first of these was Telefónica, although we have to go back to 2007 (the same year as the high of Ibex), when its titles were above 22 euros. The price is currently less than 4 Euros, and has risen by over 17% on the year.

The level at which the telco currently trades gives it a stock market value of approximately 22,820 million euros. In other words, It’s less than a quarter of the market capitalization it reached 16 years ago, In a more modest aim, it is also far from the 5 euro price it reached last year.

Although analysts do not think it can reach these figures in the medium term, the fact is that they give it a vote of confidence. On average, analysis houses covering Telefónica place a target price of 4.36 euros on its shares, a valuation that implies Revaluation potential of 10% With respect to the current price, according to data compiled by Reuters. The average recommendation is ‘Hold’.

The telco presented its results for the first quarter a week ago (May 11) with a profit of 298 million euros, which is 57.9% less than in the same period last year. The market’s consensus was between 300 and 305 million euros.

One of the IBEX 35 heavyweights to exceed 100,000 million euros in market capitalization was Banco Santander, which marked this milestone in April 2015. Its current value at parquet is about 51,740 million, which translates into it being almost halved from its peaks. In between, the purchase of an entity in trouble like Banco Popular (2017) and a complicated situation for banks: when it looked like a rate hike could re-beat the old reputation for action, a financial crisis-like fear arose. Done. 2008 means getting the ax for price.

However, the truth is that Santander is still up 14% so far this year, and analysts are confident that it will continue its upward trend once doubts about world banking calm down: according to data collected by Reuters, Analysts on average give the stock a ‘Buy’ recommendation, with Target price of EUR 4.60 with an upside of 46.5% from the current price,

The bank headed by Ana Botín posted a profit of 2,571 million euros, up 1% in current euros compared to the same period in 2022, supported by strong growth in commercial activity, good asset quality and control over costs. The full annual impact of the temporary levy in Spain was recorded in the first quarter (224 million euros). Excluding this impact, imputed profit would have been 2,795 million euros, 8% higher (10% in current euros).

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The last IBEX 35 company to reach the €100,000 million level in November 2021 was Inditex. The textile giant is almost a stone’s throw from these levels, and in fact the current 96,900 million consolidates it on the throne of the most valuable asset. Selective, which had lost the previous year in a short-lived manner to Iberdrola.

Inditex, which is up 27.5% so far in 2023, maintains analyst confidence, though it appears to be nearing its ceiling: an average of price-covering analysis houses rate Inditex as a ‘buy’ and Advises a target price of 31.96 euros, barely 2.6% higher than the current price. If this level is reached, the market cap will be 99,600 million euros.

The textile giant will present its quarterly accounts on 7 June, fulfilling a tradition of being the last Ibex 35 company to reveal its results given the quirks of its calendar.

On a smaller scale than what happens with Banco Santander or Telefónica, another company that managed to become a heavyweight on the Ibex 35 before the deflation is Cellnex. The company was one of the great heroes of the market in 2021, surpassing 40,000 million market capitalization in August of that year, making Value Select one of the greats.

Almost two years later, it has a market capitalization of €25,900 million, and this despite the fact that it has managed to rally by 23% in these first months of 2023. Analysts covering the stock have a ‘Buy’ recommendation on it with an average price target of €48.80. This valuation translates into an upside potential of 27.9% over the next 12 months.

Cellnex presented accounts for the first quarter of 2023 at the end of April, announcing that it had reduced its losses to 91 million, compared to 93 million a year earlier. The net result reflects the impact of amortization (+13%) and finance costs (+12%) associated with the consolidation process of acquisitions and integrations in recent years.

On the revenue side, Selnex achieved a turnover of 985 million euros, up 19% compared to the same period in 2022. Adjusted gross operating income (EBITDA) was $730 million (+15%), while recurring free cash flow grew 12% to $336 million.

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