Tecnicas Reunidas (TRE) AI Stock Analysis

• Market Cap: €2.15B
• Dividend Yield: N/A
• Average Volume (3M): 173.07K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 1.13
• Revenue Growth: 41.87%
• EPS Growth: 55.79%
• Country: ES
• Employees: 10,451
• Sector: Energy
• Sector Strength: 52
• Industry: Engineering & Construction
• EPS (TTM): 0.62
• Shares Outstanding: 80,301,260
• 10 Day Avg. Volume: 187,166
• 30 Day Avg. Volume: 173,068
• PEG Ratio: 0.32
• Price to Book (P/B): 2.26
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 11.58
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €36.00
• Price Target Upside: 30.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: €27.00 ▼(-1.96% Downside)

Tecnicas Reunidas shows a solid recovery in profitability and revenue growth, but high leverage and moderate cash flow stability pose financial risks. The technical analysis indicates bearish momentum, and the valuation is fair but lacks a dividend yield. These factors collectively result in a moderate overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategies, supporting long-term financial stability.

Profitability Improvement

Improved profitability margins reflect better cost management and operational efficiency, enhancing the company's competitive advantage.

Cash Generation

Improved cash generation capability strengthens financial flexibility, allowing for strategic investments and debt management.

Negative Factors

High Leverage

High leverage can increase financial risk, especially during economic downturns, potentially impacting long-term financial health.

Low Equity Ratio

A low equity ratio suggests reliance on debt financing, which could limit growth opportunities and increase vulnerability to market changes.

Operational Efficiency

Low operational efficiency margins indicate potential challenges in maximizing profitability, necessitating improvements for sustained growth.

Tecnicas Reunidas Business Overview & Revenue Model

Company Description

Técnicas Reunidas, S.A., an engineering and construction company, engages in the design and management of industrial plant projects worldwide. It operates through Oil and Gas, Power, and Other Industries segments. The Oil and Gas segment offers engineering, procurement, and construction services in oil processing operations and chemical production and processing operations; services related to the natural gas production and extraction value chain, such as production, processing, storage, and transportation; constructs, revamps, and expands refining plants; designs and builds auxiliary services and other refining units; and designs and constructs monomers, polymers and plastics, chemical, and fertilizer producing and processing plants. The Power segment provides consulting, engineering, procurement, and construction services for a range of electricity generating plants comprising conventional thermal plants, combined cycle power plants, gasification integrated with combined cycle, nuclear plants, co-generators, solar plants, fuel cells, solid waste, and biomass technology, as well as plant operation and maintenance services; and supplies turnkey plants. The Other Industries segment undertakes projects in various areas that include airports, industrial facilities, and desalination and water treatment plants, as well as projects for public authorities and other organizations, including management of car parks, and sports centers. It is also involved in the property development and machinery wholesale business; and provision of inspection, quality control, and technical consulting services. The company was formerly known as Lummus Española, S.A. and changed its name to Técnicas Reunidas, S.A. in 1972. Técnicas Reunidas, S.A. was incorporated in 1960 and is based in Madrid, Spain.

How the Company Makes Money

Tecnicas Reunidas generates revenue primarily through contracts in the engineering and construction sector, focusing on large EPC projects. The company makes money by bidding on and securing contracts with clients in the oil and gas, power, and industrial sectors, where it charges fees for its engineering services, project management, and construction work. Key revenue streams include fixed-price contracts, cost-plus contracts, and time and materials contracts, which provide various levels of risk and return depending on the project. Additionally, TRE often enters into partnerships and joint ventures with other companies to leverage shared expertise and resources, which can enhance its competitive edge and increase project opportunities, contributing to its overall earnings.

Tecnicas Reunidas Financial Statement Overview

Summary

Tecnicas Reunidas has shown improvement in profitability and revenue growth, with a notable increase in gross and net profit margins. However, high leverage and moderate cash flow stability indicate financial risks that need careful management.

Income Statement

Tecnicas Reunidas has shown a consistent improvement in profitability over recent years. The gross profit margin increased from 25.6% in 2022 to 27.5% in 2023, indicating improved cost management. Net profit margin also improved significantly, reaching 2.0% in 2023 from a net loss in 2022. Revenue grew by 7.6% year-over-year, showcasing a positive growth trajectory. However, while EBIT and EBITDA margins have improved, they remain relatively low, suggesting room for enhancement in operational efficiency.

Balance Sheet

The balance sheet reflects moderate financial health with a debt-to-equity ratio of 2.86, indicating high leverage which could pose risks during economic downturns. The equity ratio stands at 8.4%, showing a lower proportion of equity in the asset base. Return on equity improved to 20.6% in 2023, reflecting better utilization of shareholder funds, but the high debt level remains a concern.

Cash Flow

Free cash flow showed a modest growth of 9.6% in 2023, indicating improved cash generation capability. The operating cash flow to net income ratio is 1.36, which is positive, suggesting that earnings quality is decent. However, the free cash flow to net income ratio of 1.11 indicates that free cash flow generation, while stable, could be improved further. Overall, cash flows are relatively stable but have room for enhancement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.09B	4.45B	4.14B	4.23B	2.81B	3.52B
Gross Profit	1.31B	1.22B	1.11B	873.09M	684.04M	944.42M
EBITDA	248.42M	218.78M	187.84M	46.41M	-125.81M	134.01M
Net Income	106.09M	89.94M	60.95M	-37.13M	-190.44M	11.05M
Balance Sheet
Total Assets	5.26B	4.63B	4.50B	4.82B	3.88B	3.94B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.02B	1.03B	970.23M	676.59M	931.69M
Total Debt	965.24M	888.64M	906.54M	1.03B	784.31M	757.27M
Total Liabilities	4.78B	4.23B	4.18B	4.73B	3.78B	3.65B
Stockholders Equity	467.71M	389.13M	313.66M	70.77M	95.10M	272.66M
Cash Flow
Free Cash Flow	0.00	75.81M	69.17M	81.23M	-270.14M	-120.63M
Operating Cash Flow	0.00	83.07M	83.18M	83.99M	-267.17M	-116.58M
Investing Cash Flow	0.00	-7.01M	-13.74M	-1.19M	14.03M	30.64M
Financing Cash Flow	0.00	-91.30M	4.53M	210.00M	-11.52M	129.85M

Tecnicas Reunidas Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.54
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:TRE, the sentiment is Negative. The current price of 27.54 is below the 20-day moving average (MA) of 28.09, below the 50-day MA of 29.55, and above the 200-day MA of 22.30, indicating a neutral trend. The MACD of -0.44 indicates Positive momentum. The RSI at 43.47 is Neutral, neither overbought nor oversold. The STOCH value of 42.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:TRE.

Tecnicas Reunidas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSJ	76 Outperform	€497.45M	13.51	17.08%	1.91%	3.23%	12.32%
ACS	70 Outperform	€22.13B	25.16	19.75%	2.37%	25.47%	7.63%
ANA	69 Neutral	€10.19B	12.21	18.00%	2.83%	4.87%	339.22%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
SCYR	65 Neutral	€2.97B	29.42	10.80%	5.30%	2.03%	-32.59%
TRE	58 Neutral	€2.15B	16.41	24.64%	―	41.87%	55.79%
OHLA	48 Neutral	€480.88M	-12.75	-6.41%	―	1.39%	72.34%