Cellnex (CLNX SM) Spain
Real Estate
CLNX announces a share buyback programme of up to €800m for 2025 - much larger (and earlier) than Robert Crimes had been expecting. Given his target price is more than 140% above the current share price, buybacks are hugely value accretive. He sees potential for buybacks of €1.3bn p.a. for 4 more years after 2025, with total value accretion of €12 a share over 5 years, equal to a substantial 40% of the share price. CLNX is 3rd of 24 on Insight’s Stock Ranking System and their preferred pick in Telecom Infrastructure, ahead of Inwit (ranked 7th).
Edition: 203
- 24 January, 2025
EU Towers: A rising risk from land aggregators
Real Estate
Cellnex and Inwit have recently pivoted towards buying more land. Why? In part because they still see a good opportunity to deploy capital attractively, but New Street believes this is also driven by a defensive angle against a gradually rising role of land aggregators in Europe. In this note, they explore in more detail for the first time the role of land aggregators in Europe and how it might affect tower companies in future. They also update some of their broader valuation parameters for these names too. They remain Neutral on the EU tower space at current valuations.
Edition: 185
- 03 May, 2024
Transactions indicate high upside for listed Infrastructure
Industrials
Robert Crimes reviews 138 global infrastructure deals that took place between 2015 and 2023, focusing on the 38 where he had a DCF based NAV. These transactions averaged a -3% discount to Insight NAV but listed valuations trade at a -35% discount. Share prices would need to rise c.50% to close the valuation gap. Robert expects deal flow to continue driven by undervaluation of listed corporates, resilient indexed linked FCF growth and reducing COC. Insight's key Buys to arbitrage from listed to unlisted are Ferrovial, Getlink, Inwit and Cellnex.
Edition: 177
- 12 January, 2024
Cellnex (CLNX SM) Spain
Industrials
Focus on organic growth opens a new chapter in the equity story of CLNX - Alex Dwek believes the telecom giant is well positioned to benefit from its strong position within the European 5G ecosystem. Now that BTS and expansion capex are being reduced, organic growth will allow for CLNX’s tenancy ratio to increase (from 1.36x) and be more in line with peers such as Inwit (2.16x) and Vantage Towers (1.45x). Shorter-term catalysts such as the appointment of a new CEO (Marco Patuano), a significant deleveraging (from 6.5x net debt/EBITDA) and a strong cash flow generation, as well as reaching investment grade should also support the fundamentals. TP €56 (50% upside).
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Edition: 162
- 09 June, 2023
Betaville smokes out £1.5bn Wood Group takeover bid
On Feb 22nd Betaville broke the news that the FTSE 250 company was at the centre of a takeover rumour. Later that day management confirmed they had received an approach from Apollo. The PE firm has recently made a final offer at 240p a share; a 60% premium from when Betaville first broke the story. Since then, Betaville has published several other alerts about UK, European and US-listed companies. These stories include takeover rumours surrounding INWIT - where Reuters subsequently followed up that story, suggesting PE firm Ardian has appointed bankers from JPMorgan to work on an offer. Other alerts include One Swiss Bank and US-listed Paratek Pharmaceuticals.
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Edition: 158
- 14 April, 2023
Vantage Towers (VTWR GR) Germany
Industrials
Strong, high visibility FCF with rising tenancy ratio - Robert Crimes increases his TP to €56 (90% upside). Revenues +7% CAGR (2022-26E), driven by inflation escalators, new organic POP growth on existing sites and BTS sites. While Robert expects some near term margin pressure this year, he forecasts a swift recovery in FY24. Dividend yield to increase from 2.9% to 7.8% (FY26E). There is also plenty of firepower for acquisitions with Inwit seen as an attractive target given its FCF growth, strong market position and undervaluation.
Edition: 136
- 27 May, 2022
Inwit (INW IM) Italy
Industrials
In recent weeks INW has sold off on news of 4-to-3 consolidation in Italy and fears over the ensuing tenancy losses. However, New Street believes the market may have underestimated the protections embedded within the company's MSAs. They now think that INW may be a beneficiary of consolidation in the Italian mobile market, with further potential upside from the issuance of new mobile spectrum bands in the future. TP €12.50 (40% upside).
Edition: 129
- 18 February, 2022
The Arbitrage Between Unlisted & Listed Infrastructure Assets
Industrials
Transaction volumes have risen from €20bn p.a. in 2019-20 to €58bn in 2021, with acquirers preying on listed assets, such as ASPI, Sydney Airport, OMA and IRB. Having reviewed the 109 largest deals (2015-21), Robert Crimes reveals transportation infrastructure listed valuations are at c.30% discounts to transactions based relative to Insight’s NAV.s (set by DCF.s) and share prices need to rise c.40% to close the valuation gap. His top picks (combining undervaluation and probability of a takeover) are Inwit, Getlink, Aleatica and Ferrovial.
Edition: 124
- 26 November, 2021
Insight’s Global Infrastructure Stocks Offer Massive Upside
Industrials
Strong recovery from Covid, high lifetime FCF & IRR.s intact - companies covered by Robert Crimes offer an average upside of 73%. Europe (+98%) leads the way, followed by Asia Pacific (+51%) and South America (+43%). Highest average upside for Towers (+98%); prefers Inwit (+130%) to Vantage Towers and Cellnex. Airports (+81%); top pick is Aena (+131%). Stock selection in Toll roads is crucial - favours PINFRA & Aleatica in Mexico, offset by no upside for CCR in Brazil. In Contractors, Robert's top pick (and his No.1 ranked stock) is Ferrovial (+143%).
Edition: 119
- 17 September, 2021
INWIT (INW IM) Italy
Industrials
Visible, strong and non-volatile recurring FCF growth - Insight expect outperformance of the company’s Business Plan driven by 5G and the need for network densification to accommodate ever increasing mobile data. Forecasts EBITDaL of €800m in 2026E and Recurring FCF of €727m (vs. €373m 2021E) with the dividend yield increasing from 3.5% 2021E to 8.3% 2026E. Long-term forecasts are also included, modelling BTS programme, organic POP growth and lease cost reductions. Focus is on FCF with detailed DCF/COC/IRR-Ke analysis. TP of €20.3 (+123% upside) is 65% above consensus.
Edition: 111
- 28 May, 2021