Cellnex Shares Climb on Investment-Grade Strategy After Nine-Month Revenue Rise

By Ed Frankl

Cellnex Telecom SA shares rose Friday, after nine-month revenue grew and it said it would focus on committing to securing an investment-grade credit rating.

At 0850 GMT, shares were up 4.8% to EUR37.91.

The Spanish telecoms-infrastructure company said revenue in the period to September rose 46% from a year earlier to 2.57 billion euros ($2.6 billion), with revenue in the third quarter around 1% above consensus expectations, RBC Capital Markets analyst Bora Lee said.

The company said it would commit to securing an investment-grade rating of BBB- from S&P Global Ratings, as well as maintaining that level from Fitch Ratings.

While results were mostly in line with views and the company effectively reiterated its targets for 2022, the main story is its long-awaited pivot in strategy toward organic growth and objective to becoming investment grade, Citi analyst Georgios Ierodiaconou said in a research note.

The new targets still leave some room for selective mergers and acquisitions, though they eliminate flexibility for major acquisitions, Mr. Ierodiaconou said, adding that it is a sensible pivot given transaction multiples have remained high in the space.

“Cellnex has shown agility in adapting to the environment and the shift should ensure tail risks are eliminated,” he said.

Write to Ed Frankl at edward.frankl@dowjones.com


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