Grocer's Arithmetic

Introduction

Today Mota-Engil, which I analysed recently, in this analysis, presented its results for the first half of 2026.

These results were in line with what I expected and they confirm the group’s ability to execute.

Grocer’s Arithmetic

I just want to leave some grocer’s arithmetic here, with two scenarios, and two possible share prices for the end of 2026 for Mota.

Taking into account the order book and the controlled debt, I consider that a fair, or even conservative, P/E for the company would be a P/E of 12.

It is also necessary to give the context that in the first half of 2025 the net margin was 2.2% and that in the second half of 2025 it rose to 2.5%. As for revenue, we had roughly €5,300M in 2025.

In these results, and according to the guidance given by management, an increase of 10–15% in revenue is estimated for this year, relative to last year. Which makes sense, given the start of several large-scale projects. So we can count on around €5,800M – €6,100M of revenue, according to the Building26 plan.

As we saw above, we have an expansion of the net margin, and, in the results for the first half of 2026, we started the first 6 months with a margin of 2.6% (it is normal for the margin to rise at the end of the year because of the closing of the accounts on public tenders and the corresponding budget for the year, among other factors).

With the paragraph above in mind, let us get to the arithmetic:

First scenario - more conservative

Revenue grows in the more restrained way and ends 2026 at €5,800M.

In keeping with this more restrained growth, we also have a margin that grows moderately, with the company ending on a net margin of 2.8%.

Net profit = €5,800M × 0.028 = €162.4M

Let us round down to €160M.

Rounding the number of shares up to 307M (a rounding that makes the arithmetic less favourable):

EPS = €160M ÷ 307M = 0.521

For a P/E of 12:

Share price = 12 × 0.521 = €6.252

Second scenario - more optimistic

Revenue grows in the best way forecast and we end 2026 at around €6,100M.

In keeping with this more expansionary growth, we also have a margin that grows as management forecast, with the company ending on a net margin of 3%.

Net profit = €6,100M × 0.03 = €183M

Let us round down to €180M (the figure in the guidance of the Building26 strategic plan).

Rounding the number of shares up to 307M (a rounding that makes the arithmetic less favourable):

EPS = €180M ÷ 307M = 0.586

For a P/E of 12:

Share price = 12 × 0.586 = €7.032

Summing up, and shuffling the deck

The more conservative scenario gives us an upside, at today’s closing price (€4.82) and to the end of this year, of:

6.252 − 4.82 = €1.432

1.432 ÷ 4.82 = 29.7% of upside

The more optimistic scenario gives us an upside, at today’s closing price (€4.82) and to the end of this year, of:

7.032 − 4.82 = €2.212

2.212 ÷ 4.82 = 45.9% of upside

The wise Mohnish Pabrai would say: “Heads, I win; tails, I don’t lose much.”

I would say: “Heads, I win; tails, I win even more.”

Let us see what the future holds — the future belongs to God alone! Happy investing!