Barclays cuts ACS and Hochtief on CIMIC, Abertis challenges
** Barclays cuts Spanish construction and engineering company ACS ACS.MC and its German subsidiary Hochtief HOTG.DE to "equal weight" from "overweight", citing challenges at Hochtief unit CIMIC and a need to reinvest at ACS affiliate Abertis
** The termination of the Texas State Highway 288 project "highlights the need for reinvestment," at Abertis, the broker says
** Barclays suggests more cheap or front-loaded deals like the Chilean Ruta 5 will be needed at Abertis to protect its credit rating
** On CIMIC, the broker points to increased risk due to its transition away from fossil fuels toward mining through the consolidation of its subsidiary Thiess and several bolt-on acquisitions
** Barclays sees the mining sector weighed down by slowing demand in China and tougher regulation
** CIMIC has around 60% exposure to thermal and met coal, particularly in Australia, the broker says, where it also sees growth and regulation challenges
** Still, the broker says that both ACS and Hochtief valuations "look reasonable" and keeps its PTs unchanged at 42 euros and 121 euros, respectively
Reporting by Bernadette Hogg
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