BME:TLGO

Stock Analysis Report

Executive Summary

Talgo, S.A. designs, manufactures, and sells rolling stock and maintenance equipment worldwide.

Rewards

Trading at 72.2% below its fair value

Earnings are forecast to grow 23.96% per year

Earnings grew by 108.1% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Proven track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Talgo's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TLGO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.5%

TLGO

0.9%

ES Machinery

1.7%

ES Market


1 Year Return

19.5%

TLGO

13.5%

ES Machinery

6.9%

ES Market

Return vs Industry: TLGO exceeded the Spanish Machinery industry which returned 13.5% over the past year.

Return vs Market: TLGO exceeded the Spanish Market which returned 6.9% over the past year.


Shareholder returns

TLGOIndustryMarket
7 Day0.5%0.9%1.7%
30 Day3.3%-0.2%-0.1%
90 Day11.8%4.0%2.1%
1 Year19.5%19.5%16.0%13.5%10.8%6.9%
3 Year37.2%35.6%31.9%22.9%13.1%2.4%
5 Yearn/a54.9%36.1%14.1%-5.1%

Price Volatility Vs. Market

How volatile is Talgo's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Talgo undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TLGO (€5.95) is trading below our estimate of fair value (€21.37)

Significantly Below Fair Value: TLGO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TLGO is poor value based on its PE Ratio (27.3x) compared to the Machinery industry average (27.3x).

PE vs Market: TLGO is poor value based on its PE Ratio (27.3x) compared to the Spanish market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: TLGO is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: TLGO is overvalued based on its PB Ratio (2.5x) compared to the ES Machinery industry average (1.9x).


Next Steps

Future Growth

How is Talgo forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

24.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TLGO's forecast earnings growth (24% per year) is above the savings rate (0.4%).

Earnings vs Market: TLGO's earnings (24% per year) are forecast to grow faster than the Spanish market (10.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TLGO's revenue (11.9% per year) is forecast to grow faster than the Spanish market (3.5% per year).

High Growth Revenue: TLGO's revenue (11.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TLGO's Return on Equity is forecast to be low in 3 years time (17.6%).


Next Steps

Past Performance

How has Talgo performed over the past 5 years?

-21.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TLGO has high quality earnings.

Growing Profit Margin: TLGO's current net profit margins (7.7%) are higher than last year (4.2%).


Past Earnings Growth Analysis

Earnings Trend: TLGO's earnings have declined by -21.2% per year over the past 5 years.

Accelerating Growth: TLGO's earnings growth over the past year (108.1%) exceeds its 5-year average (-21.2% per year).

Earnings vs Industry: TLGO earnings growth over the past year (108.1%) exceeded the Machinery industry 7.8%.


Return on Equity

High ROE: TLGO's Return on Equity (9.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Talgo's financial position?


Financial Position Analysis

Short Term Liabilities: TLGO's short term assets (€603.2M) exceed its short term liabilities (€254.6M).

Long Term Liabilities: TLGO's short term assets (€603.2M) exceed its long term liabilities (€291.3M).


Debt to Equity History and Analysis

Debt Level: TLGO's debt to equity ratio (90.7%) is considered high.

Reducing Debt: TLGO's debt to equity ratio has increased from 34.9% to 90.7% over the past 5 years.

Debt Coverage: TLGO's debt is well covered by operating cash flow (65.7%).

Interest Coverage: TLGO's interest payments on its debt are well covered by EBIT (6.6x coverage).


Balance Sheet

Inventory Level: TLGO has a low level of unsold assets or inventory.

Debt Coverage by Assets: TLGO's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

What is Talgo's current dividend yield, its reliability and sustainability?

2.07%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%2.3%markettop25%5.5%industryaverage2.8%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TLGO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TLGO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TLGO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TLGO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: TLGO is not paying a notable dividend for the Spanish market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TLGO's dividend in 3 years as they are not forecast to pay a notable one for the Spanish market.


Next Steps

Management

What is the CEO of Talgo's salary, the management and board of directors tenure and is there insider trading?

15.9yrs

Average management tenure


CEO

José María de Oriol Fabra (56yo)

17yrs

Tenure

€11,187,000

Compensation

Mr. Jose María de Oriol Fabra serves as the Chief Executive Officer at Talgo, S.A since December, 2002 and served as its Deputy Chairman. Mr. de Oriol Fabra serves as Deputy Chairman and Director for Trans ...


CEO Compensation Analysis

Compensation vs Market: José María's total compensation ($USD0.00) is about average for companies of similar size in the Spanish market ($USD935.62K).

Compensation vs Earnings: José María's compensation has increased by more than 20% in the past year.


Management Age and Tenure

15.9yrs

Average Tenure

52yo

Average Age

Experienced Management: TLGO's management team is seasoned and experienced (15.9 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

57yo

Average Age

Experienced Board: TLGO's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • José María de Oriol Fabra (56yo)

    CEO & Director

    • Tenure: 17yrs
    • Compensation: €11.19m
  • Carlos de Palacio y Oriol (66yo)

    Chairman & President

    • Tenure: 17.9yrs
    • Compensation: €11.25m
  • María José Zueco Peña

    Secretary

    • Tenure: 4.8yrs
  • Mario Alejandro Álvarez García

    Deputy Secretary

    • Tenure: 4.8yrs
  • Eduardo Fernández-Gorostiaga (46yo)

    Chief Financial Officer

    • Tenure: 16.9yrs
  • Fernando Aznar (49yo)

    Business Development Director

    • Tenure: 0yrs
  • Luis Alfonso Henar (52yo)

    Chief Operating Officer

    • Tenure: 0yrs
  • Yolanda Juanas (53yo)

    Human Resources Director

    • Tenure: 0yrs
  • Diego Sobron (47yo)

    Deputy Chief Financial Officer

    • Tenure: 15.9yrs
  • Javier Oriol Piñeyro

    IR Director

    • Tenure: 0yrs

Board Members

  • Jack Pope (70yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: €75.00k
  • Javier Bañon (55yo)

    Director

    • Tenure: 13.8yrs
  • Ramón Hermosilla Gimeno

    Director

    • Tenure: 4.8yrs
    • Compensation: €60.00k
  • Emilio Novela Berlín (67yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: €98.00k
  • José María de Oriol Fabra (56yo)

    CEO & Director

    • Tenure: 17yrs
    • Compensation: €11.19m
  • Carlos de Palacio y Oriol (66yo)

    Chairman & President

    • Tenure: 17.9yrs
    • Compensation: €11.25m
  • Miguel Abelló Gamazo (41yo)

    Representative Director

    • Tenure: 4.8yrs
  • Javier Fernando Olascoaga Palacio (39yo)

    Representative Director

    • Tenure: 4.8yrs
  • Albertus Meerstadt (57yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: €83.00k
  • Segundo Vallejo Abad (70yo)

    Director

    • Tenure: 0yrs

Company Information

Talgo, S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Talgo, S.A.
  • Ticker: TLGO
  • Exchange: BME
  • Founded: 1942
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: €771.811m
  • Shares outstanding: 129.72m
  • Website: https://www.talgo.com

Number of Employees


Location

  • Talgo, S.A.
  • Paseo del tren Talgo, 2
  • Las Matas
  • Madrid
  • Madrid
  • 28290
  • Spain

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TLGOBME (Bolsas y Mercados Espanoles)YesClass A Ordinary SharesESEURMay 2015
TLGOeBATS-CHIXE (BATS 'Chi-X Europe')YesClass A Ordinary SharesGBEURMay 2015
0R99LSE (London Stock Exchange)YesClass A Ordinary SharesGBEURMay 2015

Biography

Talgo, S.A. designs, manufactures, and sells rolling stock and maintenance equipment worldwide. It offers very high speed, high speed, and intercity trains; and locomotives. The company also provides maint ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 22:41
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.