Logista (AO) | Reduce | Major regulatory threat in Spain

Research evidence excerpt

Logista (AO) | Reduce | Major regulatory threat in Spain

ly to quantify the earnings impact, we believe any benefit from restricting vaping product

sales to tobacconists would be outweighed by lower tobacco consumption, especially given the relatively small size of the vaping

market in Spain. Overall, if approved broadly in its current form, we view the proposal as a net negative for the company.

Reduce, TP EUR25.80 and part of our European Stocks to avoid list

The increasingly restrictive regulatory environment for Logista remains one of the key pillars of our Reduce recommendation,

which we have maintained since our downgrade in December (see our in-depth note).

Our cautious stance is driven by structural headwinds affecting the tobacco business, namely declining cigarette volumes,

progressively tighter consumption restrictions and continued regulatory uncertainty surrounding next generation products

(NGPs), as well as other non-operating elements such as the normalisation in LOG's interest income and profit on inventory.

A weak M&A track record compounds these risks. Both El Mosca and Carbó, acquired in 2022, are currently undergoing

restructuring, suggesting that execution and integration risks were not fully captured during the acquisition process. In our view,

this should increase investor scrutiny over any future M&A, especially from Imperial Brands (controlling shareholder).

From an earnings standpoint, these dynamics translate into a company with very limited growth prospects. We forecast flat Adj.

EPS over 2025-30E and see dividend distributions (EUR2.09/share in FY25) starting to erode the cash position as early as 2028 if

the dividend is held flat, a policy that was changed last year after years of maintaining a payout over earnings.