The average target price of RLIA.MC is 1.1 and suggests 24% 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 24% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1.1. This suggests 24% 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 132mn in the last 12 months, down 25% 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 0.02. Market expects EPS to reach EUR 0.05 in FY25.

The stock has been falling steadily in the past six months, losing 7% in total. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 2ppts over past six months and grown 6ppts slower in the past month. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 4ppts over six months and grew 9ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 22.9% in the last 12 months, up from 12.0% in FY23. 

Realia Business, S.A. reported a return on equity (RoE) of 3.2% in the last 12 months, down from 71.1% in FY23. The market consensus projects an RoE of 68.4% in FY24, this time above its peers. 

Another important profitability metric, return on assets (RoA), amounted to 1.8% in the last 12 months, a decrease from 40.0% in FY23. The market analysts predict that RoA will be 38.5% in FY24, more robust than its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) declined to 2.2%, below the peers. The consensus estimate for FY24 for RoCE is 0.3%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.7 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, excessive margin volatility, weak debt servicing capacity, and inadequate interest coverage. We note robust profitability, solid return on capital, 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 fairly valued relative to its peers. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITDA, underpriced on P/FCF. 

Realia Business, S.A.

€ 0.9

4

Realia Business, S.A.

€ 0.9

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 0.9

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