Barclays has adjusted its stance on Acciona SA (ANA: SM) (OTC: ACIXF), downgrading the stock from Equalweight to Underweight and revising the price target to €118.00 from the previous €125.00.
The investment firm's decision comes in response to the stock's recent performance, which has been buoyed by the rebound in renewables through its affiliate Acciona Energia.
The downgrade replaces the firm's previous position on Naturgy as part of a strategy to minimize exposure to cyclical activities, particularly within Acciona's construction business. Barclays noted that Acciona's share price has eliminated the holding discount, which is now at zero, prompting the downgrade.
Acciona's stock performance has been notably strong in comparison to its renewables affiliate and the broader market. Year-to-date figures show Acciona's shares down by only 4.4%, while the S&P Euro 6 Utilities Index (SPX6) rose by 5.2%.
This is in stark contrast to Acciona Energia, which saw a decline of 24.4% in the same period. Barclays highlighted that this performance is disproportionate, especially considering that Acciona was trading at a 10% holding discount at the end of the first quarter of 2024 but has since moved to a holding premium.
The firm's analysis indicates that the market's response to Acciona's share price has been excessive, given the overall poor performance of the pure renewables sector within European utilities this year.
The shift from a discount to a premium in Acciona's holding value appears to be a key factor in the downgrade decision, suggesting that the current stock price may not fully reflect the underlying cyclical risks associated with the company's construction segment.
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