Positive morning for A2A in Piazza Affari, in contrast with the negative trend of the market. The A2A stock is up sharply this morning in the wake of the promotion of Goldman Sachs which brought the recommendation to "buy" from "neutral" and a target price of 1,04 euros from the previous 0,97 euros. At 10,45 the share gained 1,68% to 0,81 euro and over 5,5 million pieces traded.
According to the Goldman Sachs report, “following a 14% underperformance versus the industry since the beginning of the year, A2A is trading at a 7% discount on 2015 price/earnings estimates, despite our expectations for higher earnings growth ”. Goldman Sachs expects strong cash generation and dividend growth.
On the occasion of the presentation of the new business plan in the first half of 2015, the investment bank expects “it will be focused on potentially strengthening efforts to cut costs, on the restructuring of existing power generation plants and on playing a key role in the consolidation of the utility sector in Italy”.
On the risk front, Goldman Sachs notes the problems related to the generation of electricity (such as the drop in prices which should lead to lower profits in 2015) and the question of the "overhang": the two main shareholder municipalities, Milan and Brescia, aim to sell another 4,5 .XNUMX% stake next year. “M&A represents both an opportunity and a risk, but we believe that A2A can act as a consolidator generating moderate synergies”, concludes the study.
