GRFS - Grifols: Q4 Was Positive Still Too Many Question Marks
2024-03-05 10:19:08 ET
Summary
- Grifols faces new accusations from the hedge fund Gotham City.
- Gotham City questions loans and outgoing flows recorded in Grifols' financial report, as well as the role of Scranton Enterprises.
- Grifols disclosed a lack of FCF generation in 2024.
- We are neutral, given a soft outlook for the current year. On a positive note, Grifols confirmed the Shanghai RAAS equity stake divestment.
There is no peace for Grifols, S.A. ( GRFS ). Once again, the Spanish Plasma company is in the crosshairs of the short-selling fund Gotham City, which had already accused Grifols of cooking its accounts in January 2024. Here at the Lab, we initiated the company with a Strong Buy recommendation ( A Promising Buy Opportunity ). Then we reverted our rating with a recent publication called: Wait And See For Now . Gotham City's allegations against the Spanish company caused the share to decline significantly (-48% year-to-date), and for prudency reasons, our team decided to wait for further clarification. Gotham published a second document two weeks ago with new findings, and Grifols shares declined again. As a reminder, the first report was an accusation of data manipulation. In particular, according to the fund, the company would have reduced the ratio between debt and EBITDA, which would not be equal to 6 times, as declared in the official documents, but between 10 and 13 times . Grifols responded by suing the hedge fund and asking for damages....
Grifols: Q4 Was Positive, Still Too Many Question Marks