Gamesa Surges 7.5% as Outlook Brightens Amid Siemens Talksby
Gamesa Corp Tecnologica SA’s shares climbed after the Spanish wind turbine maker, already in merger talks with Siemens AG, accelerated its earnings targets because of surging demand.
The stock rose as much as 1.21 euros, or 7.5 percent, to 17.29 euros before trading at 16.99 euros at 11:49 a.m. in Madrid. It was the biggest intraday gain since Feb. 9, following a report that merger talks with Siemens were close to completion.
“The results were in line with expectations, but the most important thing is the improvement in guidance to 2016,” said Miguel Sanchez Sanchez Gonzalez, analyst at Mirabaud & Cie in Madrid. He recommends investors overweight the stock in their portfolios.
Gamesa moved its 2017 goals a year forward to 2016 after sales last year grew 23 percent to 3.5 billion euros ($3.9 billion). Plans to build in excess of 3,800 megawatts of capacity were moved forward a year, and the company expects earnings before income and tax margins to widen to about 9 percent.
“The moment to bring forward and improve the guidance looks very appropriate,” said Cesar Gonzalez, analyst at JB Capital Markets in Madrid. “Gamesa has had a very conservative policy in the past when marking goals and giving guidance. It looks like they are negotiating an equity exchange, so it makes total sense to show the company’s strengths.”
Nordex SE, a competing wind turbine maker, rose as much as 6 percent in Frankfurt trading after preliminary earnings before interest and tax grew to 126 million euros from 78 million euros in the same period last year. Danish turbine manufacturer Vestas Wind Systems A/S boosted its dividend earlier this month and predicted that 2016 would be a record year for revenue. Vestas also rose as much as 2.2 percent.