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IBERIAN DAILY 19 FEBRUARY + 4Q’25 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AENA, FERROVIAL, INDRA, REPSOL, SANTANDER.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’25 results to be released over the coming days in Spain.

IBEX continues to lead Europe
It was another bullish session on European stock markets, with business results acting as a driver and with the IBEX once again approaching record highs. In the STOXX 600, almost all the sectors ended with gains, led by Basic Materials and Technology, with Chemicals and Real Estate posting the biggest losses. On the macro side, in the UK January’s inflation slowed, as expected, to 3.0% YoY, a low since March’25, and with the core figure at 3.1% YoY, a low since 2021. In the US, industrial output and core capital goods (both for January) rose more than expected, whereas December’s housing starts rose to a high since July’25. The Fed’s meeting minutes showed strong division among its members, but in general more cautious regarding the path to convergence of inflation, suggesting a pause in rate cuts. In US business results, Ebay, Occidental Petroleum, Edison International and Moody’s beat expectations, while Booking and Global Payments were in line.
What we expect for today
European stock markets would open mixed but with the good performance of technology and oil groups. Currently, S&P futures are up +0.15% (the S&P 500 ended -0.30% lower vs. the European closing bell). Asian markets are rising (China’s CSI 300 closed, Japan’s Nikkei +0.56% and South Korea’s Kospi +3.10%).
Today in the euro zone we will learn February’s consumer confidence and in the US February’s Philadelphia Fed, December’s trade balance and weekly jobless claims. In US 4Q’25 Results Walmart and Deere&Co, among others, will release their earnings.


COMPANY NEWS

SANTANDER. We raise our T.P. by +19% to € 12.11/sh. (+13% upside), foreseeing a 9% yield. OVERWEIGHT.
SAN share price has seen a positive performance (+25% in 6 months/ +8% vs. IBEX/ +14% vs. sector/ +15% vs. ES50) ahead of its CMD due on 25/02, which provides a demanding level for those investors expecting surprises as we believe there will be none (after it outlined in its 4Q’24 results the target of growing at least >+14% in Net Profit’25-28 (vs. +14% BS(e) and +12% consensus)). The only option left is raising shareholder remuneration and we and the market are expecting SAN to improve its cash dividend policy to a 50% payout (vs. 25% currently), which means an annual yield of ~9% with buybacks. We believe the stock could see a specific correction if the bank fails to make this announcement or if it is below this level. At 1.6x P/TE’26 it is trading at a -15% discount vs. other groups with similar ROTE.

REPSOL. Slightly worse 4Q’25 results than the consensus expected. € 700 M of share buybacks announced. We place our T.P. Under Revision.
The 4Q’25 Results are slightly worse than the consensus expected and slightly better than our forecasts. 4Q’25 adjusted Net Profit came in at € 661 M (+12% vs. 4Q’24, vs. +15% consensus and +7% BS(e)), meaning Net Profit’25 of € 2.57 Bn (-15% vs. 2024, vs. -11% BS(e) and -12.7% consensus). The company confirmed the DPS’25 of € 1.051/sh. (+7.8% vs. 2024; 6% yield, vs. €~1.06 expected) and announced € 700 M of share buybacks (~3.5% of capital), beginning with a programme of € 350 M. REP announced a guidance’26: Brent at US$ 60-65 d/b (vs. US$ 65 BS(e) and US$ 64 consensus); Henry Hub US$ 3.50-4.00/MBtu (vs. US$ 3.50 from the strategic plan, US$ 3.70 consensus and € 3.00 BS(e)); refining margin US$ 6.50-7.50 (vs. US$ 6.10 from the strategic plan, US$ 6.70 consensus and US$ 6.00 BS(e)). Operating: production of 560-570 Mbep/d (vs. more than 550 from the strategic plan, consensus and BS(e)). We place our T.P. Under Revision awaiting an update to the 2026-28 Strategic Plan (10 March) and maintain our OVERWEIGHT recommendation due to the sustainable shareholder remuneration (around 10%). Today we expect a reaction with a negative slant following the strong performance this year. There will be a conference all at 12:00 (CET).

AENA. DORA III proposal. UNDERWEIGHT.
Highlights from the DORA III proposal made public by AENA yesterday: (i) Regulated investments remain unchanged at € 9.99 Bn vs. the previous figure released; (ii) +1.3% annual traffic growth; (iii) regulatory WACC of 9%; (iv) annual fee rise of +3.8% (vs. 0% BS(e)); (v) annua cost growth of +3.8%, in line with fees. the impact on valuation would be around -6% (€ 22.00/sh.) and +12% (€~26/sh.) if we were to maintain our traffic estimates. In all the scenarios outlined the final result yields negative potential, and thus we maintain our UNDERWEIGHT recommendation.