MERLIN Properties shares have lagged somewhat in the last year within the IBEX 35, but still accumulated a considerable increase of 15.40% in the period. And looking to the future they have a upside potential of more than 28%according to analysts of Renta 4.
The firm reiterates its recommendation of ‘overweight‘ for MERLIN, with a target price of 16 euros per share which is 28.10% above Friday’s close, after the economic newspaper Expansion published today an interview with the CEO Ismael Clemente in which he reviews the SOCIMI’s strategy in the short and medium term.
In this sense, MERLIN Properties will continue with its strategic roadmap focused on data center expansion. Once phase 1 and phase 2 have been launched, the CEO of MERLIN advances that phase III, currently being planned, will be the most ambitious of all. It will initially affect developments in the Basque Country, Lisbon, Madrid and Extremadura, and will be financed with a combination of debt and new capital increases.
With this, data centers are considered the key growth engine that will completely change the scale and morphology of the company. Data centers are projected to go from representing 5% of rents last year to representing between 45% and 50% in 2030, and up to 75% by 2032-33. Regarding the cash flow, only with phase II it is estimated that it will double, going from 300 million euros to around 600 million euros.
Besides, MERLIN does not plan to sell its traditional assets to finance growth in data centersand likewise, in the long term, the possibility of investing again in traditional assets would be considered so as not to overconcentrate the business in data centers and to be able to “play” with the different market cycles.
Today the shares of MERLIN Properties fell 0.4% at mid-morning to reach 12.44 euros on the IBEX 35. However, they rose 15.40% in the last year and 46.7% if we compare their current price with the lows of 8.48 euros on April 9 of last year. The titles reached a high of 13.91 euros in October last year, with a drop of 10.5% since then.