MADRID. The current week brings the market analysis to the construction and services sector from the hands of ACS. The international giant continues trying to reverse the level of profitability harvested since the beginning of 2021 (-3.8%).
Immersed in the first part of its capital increase -in order to distribute its next flexible dividend, estimated at 1,264 euros / share-, ACS it is still in the loss zone in temporary windows of 1, 3 and 6 months. On the other hand, the annual reading (since June 2020) is positive, having added just over 11% of profitability since then.
Long-term vision. Source: xStation
ACS ‘path continues to be paved on international soil, through the constant search for new operations. A good example of this is the battle to win tenders in the United Kingdom after Brexit, a clear opportunity for the sector in relation to the new project proposed by the country (connecting Heathrow airport with South London). In projects of this magnitude, ACS will have to compete with others such as Ferrovial and Sacyr, since they all have a presence in the United Kingdom.
Additionally, and thanks to its notable presence in the United States -represents 52% of its total business worldwide-, ACS could also benefit from the infrastructure expansion plans included in the Joe Biden program.
Fundamentally, the net profit margin is still somewhat reduced (1.64%), in contrast to the level of financial leverage (250.61%). Despite the 10.5% reduction in terms of revenue in fiscal year 2020, the listed company chaired by Florentino Pérez continues to rely on previous projects as the main catalyst for its recovery.
Short-term technical vision. Source: xStation
At a technical level, the price is debated in the range between 25,700 and 26,140, coinciding with the 23.6% and 38.2% levels of the Fibonacci retracement, drawn from the last maximum observed on May 11, 2021.
In case of staying in said interval and continuing to reverse your last fall, the upper barrier could be broken, leading this to new price levels such as the one located at the 50% level of Fibo (26,475 euros).
Miguel Momobela is an analyst at XTB
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