ISS-EVA is the only analyst who recommends selling Grifols shares
Grifols is having a hard time. The pharmaceutical company is facing a real reputational and, as a result, stock market crisis due to a report published last Tuesday by Gotham City Research. Despite this, analysts continue to largely recommend his actions. The only discordant note is the opinion of X-EVA, which advises them to be sold.
Institutional Shareholder Service (ISS) is one of the main voting councilors of the world. This is what is known as proxy Todivider. Yesabout organizations providing consulting services large investors such as fund managers, pension and insurance companies. American-born, founded in 1985, its main shareholder is German stock exchange.
The company acquired financial analysis platform EVA Dimensions in 2018 to “strengthen the guidance it provides to investors before they vote at shareholder meetings,” the company explained at the time. According to their website, covers a total of 26,000 companies.
EVA owes its name added economic value (economic added value, in English or EVA). This ratio What allows you to calculate and evaluate the wealth created by companies, taking into account the level of risk with which they work, in accordance with they explain in the OIE.
And if the analyst consensus BloombergISS-EVA is the only research firm that has a Sell rating on Grifols shares. He has held this position since September last year.
Buy
This is contrary to the rest of the investment banks or research houses, which for the most part provide blood derivatives companies buying advice. In fact, one of them, Saudi Investment, puts Grifols’ recommendation in a strong buy range.
Total, according to the collection Bloomberg, 14 companies consider it most appropriate to purchase Grifols shares. These are Mirabaud Securities, Bestinver Securities, JB Capital, Citi, Alantra Equities, CaixaBank BPI, Banco Sabadell, Alphavalue, Société Générale, Kepler, Berenberg, Morningstar, Invest Securities and Jefferies.
In fact, many of them repeated their advice following the release of the Gotham City study report. And despite this, the company failed to stop the bleeding in the stock market. Even a conference with investors could not calm the market mood.
JB Capital analysts are “surprised” by the scale of the decline The company’s shares after answering questions from experts (Grifols shares fell 16.17% on Thursday and 10.4% on Friday) “especially now that Gotham City Research has shown that the company has almost completely covered its short positions.”
(The ten Gotham “victims” before Grifols survived an average stock market decline of 70%).
The company, founded by Javier Botin, hopes that the result investigation carried out by the National Securities Market Commission (CNMV) “On this issue, planned for the coming weeks, we will provide much-needed guarantees.” In his opinion, the regulator’s verdict “will be decisive.”
On the other hand, some press release from Scranton – a society in the eye of a hurricane that Gotham considers family office Grifols – the definition of its shareholders and the health of its balance sheet “may distract attention from Grifols shares,” they add.
At all, They maintain a buy recommendation., as they believe the company’s new management will “address three key issues it faces (debt, plasma collection and communications).” This, together with the high potential they give to the pharmaceutical company (more than 100% for A shares), makes Grifols “the preferred value in the healthcare sector”. In addition, they highlight that “the company is trading at a significant discount to its main competitor CSL.”
Although the situation in which Grifols is involved “it’s not without risk”Mirabaud Securities experts also did not change their buy recommendation. Of course, they hope that everything that has happened will “serve to polish some aspects” of the company, especially in the areas of finance and corporate governance.
Overweight
Other banks such as Barclays, Santander and Renta 4 transfer to companies of Catalan origin overweight recommendation. Analysts from the structure headed by Juan Carlos Ureta assess “the company’s explanations positively.”
They believe that “although he did not provide much additional information, he showed that The investment community isn’t too concerned for the arguments made by Gotham.” They said they have no plans to change their mind about the cost at this time.
In review
Equiva SIM analysts are somewhat less positive about Grifols: they advise hold shares of a blood products company. Morgan Stanley experts make a recommendation ‘equal weight’ and JPMorgan representatives are positioning themselves neutral.
These latter analysts admit “that Accounting in a company is difficult and keeping track of the reports is not so easy.” “This has long been a criticism of investors,” they emphasize. In this sense, the analytical department of an American bank would like “see improvements over time”.
(Gotham’s crusade against Grifols opens a war between bears and bulls: from General Industrial to Capital Group)
Those who put in review They are recommended by ODDO BHF experts. Although this is not included in the consensus BloombergBankinter analysts are also revising their assessment of Grifols.
For now, his tactical recommendation is to sell the stock. It will be this way until they count.”that there is sufficient publicly available information to make an informed decision.” Although they believe that “andYes “It’s good that the company is exploring part of the Gotham plot,” composition and relationships in the group They continue to “look confused.”
They maintain their confidence
With some adjustments, analysts offering opinions on Grifols maintain confidence in the company. Yes, they have changed the objective prices they give to match the value. Now They range from 11.1 euros per share at Morningstar to 22.8 at Berenberg.
Investors don’t do that. Since Gotham City Research released its report last Tuesday, accusing the company of falsifying its reports and saying its shares are “likely worth zero,” The listed company lost 39% of its market value.
Three scenarios
XTB analysts believe that “The market does not consider Grifols’ doubts resolved according to a report published by Gotham City Research” and establish three possible scenarios for the company’s development on the stock market.
“The best thing is that in the coming weeks he will convince investors with his explanations and can recover most of the losses. Most likely, it will enter into a process of uncertainty and it will not be clear who is right,” they explain. “This has a very negative impact on the company’s value, as the reputational impact could haunt and weigh on the company in the future,” they warn.
The worst case scenario is that the pharmaceutical company “forced to change his accounting and undergoes an adjustment to his assessment” This, in turn, will mean a loss of investor confidence. Finally, they note that “there are also possibility of publishing a second report“something that has already happened in previous cases with Gotham City.”
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