The average target price of RLIA.MC is 1.1 and suggests 21% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 1.1. This translates into 21% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1.1. This suggests 21% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Realia Business, S.A., together with its subsidiaries, engages in property management and homebuilding activities in Spain and internationally. It develops, manages, operates, and leases office buildings, shopping centers, commercial premises, and industrial buildings; and provides land management services. It has a land portfolio of 6,946,216 gross square meters and 1,752,340 square meters of buildable land. The company was founded in 2000 and is headquartered in Madrid, Spain.

Spain

Realia Business, S.A.

Real Estate

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been strong and significantly above its peers. 

RLIA.MC reported revenue of EUR 125mn in the last 12 months, down 29% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 100% from FY23 to EUR 0.04. Market expects EPS to reach EUR 0.05 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 4ppts and its growth accelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 5.7 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

RLIA.MC has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, excessive margin volatility, weak debt servicing capacity, and inadequate interest coverage. We note resilient historical revenue growth, robust profitability, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, RLIA.MC is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, RLIA.MC is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is slightly undervalued relative to its peers. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

Realia Business, S.A.

€ 0.94

4

Realia Business, S.A.

€ 0.94

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 0.94

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