The stock of the residential developer AEDAS Homes closed the month of January at €23.50 which means a gain in value of 6% compared to the end of 2018, when it closed at €22.16.
The homebuilder led by CEO David Martinez is the only big Spanish developer to close the first month of the year with an increase in its share price. This positive trend reflects the company’s confirmation to its shareholders that it has achieved all its targets, which include delivering completed units, launching new projects, and continuing to strategically invest in land, as well as the fact that its current land bank gives the homebuilder clear visibility over its deliveries for the next four years.
This guarantee offered by strictly adhering to stated objectives is viewed positively by the twelve brokerage firms that follow the company and the performance of its share. Of the twelve, only two have issued a hold recommendation, and none have issued a recommendation to sell. The firms give an average target price of €33.74, meaning that the stock has a potential upside of 43.4%.
The analysts’ strong position comes from the visibility the company has over its business plan for the next several years. Goldman Sachs, for example, highlights the fact that the homebuilder operates in the Spanish regions where demand is greatest and where it was able to acquire land at very competitive prices before the recovery started to take hold.
Analysts agree that “the developer’s performance is in line with the targets originally set out in its business plan and with our forecasts”, as is the case of Banco Santander, which reiterates its “recommendation to buy, as we are seeing some of our higher expectations materializing”.
Another factor to keep in mind is the current state of the sector; demand for new-build housing still outstrips supply, and increases in both prices and construction activity have been forecast.
In addition to Santander and Goldman Sachs, other firms which recommend buying shares in AEDAS Homes include Citi, UBS, Sabadell, JB Capital and Mirabaud.
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