Morgan Stanley Sees Challenges Ahead for Empresas ICA SA Despite Solid 1Q14 Results

In a report published Tuesday, Morgan Stanley analyst Nikolaj Lippmann reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “ICA surprised on stronger international construction (40% of total construction revenues) and better profitability in concession and airports. ICA's full year guidance is in line with our estimates and we think that despite the quarterly beat ICA's shares are unlikely to react strongly to 1Q14 results. We think the value of the company will be more determined by an increase in strategic and financial visibility, than quarterly results. With international construction representing 8% of the backlog and 40% of construction revenue, ICA increasingly depends on a pick up in Mexican construction activity. "For the concession business' EBITDA, which came in ~50% above our estimate, we look forward to getting light on the cash component of the number on tomorrow's call to assess the quality of the report.” Empresas ICA SA closed on Monday at $6.77.