EUR 100.00 For Business Accounts Only

IBERIAN DAILY 30 APRIL + 1Q’25 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ARCELORMITTAL, CAIXABANK, ENAGÁS, ENCE, NATURGY, REPSOL, SACYR, SANTANDER, VISCOFAN.


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 1Q’25 results to be released over the coming days in Spain.

Stock markets stabilise
Mixed performance in European stock markets on the first marathon macro data day this week. In the STOXX 600, most sectors (14/20) closed with gains, led by Utilities and Banks, with Consumer Goods and Retail falling the most. On the macro side, in the euro zone April’s economic confidence index fell more than expected, with a significant deterioration in the service component. March’s M3 fell more than expected. In Spain, 1Q’25 GDP growth lowed to 2.8% YoY vs. 3.1% expected due mainly to the falling external demand. April’s inflation fell less than expected to 2.2% YoY, with the core figure rising more than expected to 2.4% YoY. In the US, Conference Board consumer confidence for April fell more than expected to April’20 levels. March’s JOLTS fell more than expected, with the hiring rate remaining stable and with no changes in the past six months. In Japan, industrial output for March slowed down more than expected. In China, April’s manufacturing and services PMIs dropped more than expected. In US business results, Royal Caribbean, Pfizer and Paypal beat expectations, Coca-Cola was in line and American Tower released worse earnings than expected.
What we expect for today
Stock markets would open flat with some bearish bias, with the oil sector dragged down by another drop in Brent crude. Currently, S&P futures are down -0.5% (the S&P 500 ended +0.45% higher vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.05% and Japan’s Nikkei +0.28%).
Today in the euro zone we will learn the 1Q’25 GDP and in the US the 1Q’25 GDP and ADP private employment survey and PMIs (both for April). In US business results, Microsoft, Ebay, Qualcomm, Caterpillar and Meta, among others, will release their earnings.


COMPANY NEWS

ARCELORMITTAL, OVERWEIGHT
The 1Q’25 results beat expectations in EBITDA (-19.2% vs. -23.3% BS(e) and -20.8% consensus), and although the business is still under pressure, the mines offset the lower price/cost spread in steel (US$ 116/t, below the level seen in all of 2024). By regions, the price dynamic is especially negative in Europe, with some improvement in North America thanks to Mexico (return to activity) and the better spread. On the guidance level, the company suggests there is a risk of apparent demand falling due to tariffs, although no specific figure was given.
The results brought no big results, with the trends very much in line with expectations and marked by the weak steel prices and low visibility on demand.

CAIXABANK. 1Q’25 Results with slight pressure in core revenues. We downgrade our recommendation to UNDERWEIGHT.
Net Profit totalled € 1.47 Bn (+46.1%), around +14% above expectations due to lower provisions (CoR 25bps vs. 32bps BS(e)) and BFA’s unexpected dividend. NII came in slightly weaker (-3.5% vs. 4Q’24 vs. -2.6% consensus), due to pressure in Customer spread, as well as insurance revenues and banking fee revenues (+1.5% vs. +5& BS(e)). The bank acrrued and reclassified the banking tax (€ -146 M) to the tax heading, meaning a +15% increase in gross margin vs. 1Q’24 (vs. +9% consensus and +11% BS(e)). Costs (+4.8%) and CET1 (12.46%; +27bps) in line and without surprises. The group kept its 2025 guidance unchanged. We raise our T.P. by +7% to € 6.98/sh., with 9.8x P/E’27 and 1.45x P/TE’27. After outperforming its sector by +8% in the past 3 months, the share price yields limited upside.

ENAGAS. 1Q’25 Results came in slightly better in Net Profit. Guidance reiterated. OVERWEIGHT
1Q’25 Results in line in EBITDA but better in Net Profit. EBITDA totalled € 163.9 M (-8% vs. 1Q’24 vs. 163 BS(e) and consensus) and Net Profit € 65.2 M (flat vs. 1Q’24 vs. € 61 M BS (e) and consensus), with the lower regulatory revenues vs. 1Q’24 standing out, as well as higher operating expenses and lower D&A and financial expenses. NFD came in at € 2.36 Bn, in line with 4Q’24 and FFO/NFD at 28.2%, also in line. Results are in line with the annual guidance, which was reiterated by the company: Net Profit’25e € 265 M and EBITDA’25e € 670 M (in line BS and consensus). We expect a slightly positive market impact. No Conference Call will be held.

ENCE. 1Q’25 results in line with expectations. Pulp market currently recovering. OVERWEIGHT
The results were marked by the gradual recovery of the pulp market (which has put Dec’24 lows in the rear-view mirror), and with positive performance in the renewable energy business. 1Q’25 sales came in at € 186.9 M (-12.5% vs .-14.8% BS(e)), and 1Q’25 EBITDA fell -23.2% (vs. -25.8% BS(e)) to € 34.5 M, a -2.5% drop if we adjust for the impact from the change in renewable energy regulation made in 2024. We do not expect a significant impact, but looking at the stock’s poor performance (-4% in 2025 vs. +15% IBEX and -16% over the past two months vs. +2% IBEX), we think that as the strong demand and pulp are passed on to prices, the stock should react positively.

REPSOL, OVERWEIGHT
The 1Q’25 results beat our expectations and the consensus (cut since the release of the Trading Statement). Adjusted 1Q’25 Net Profit would have reached € 651 M (-48.6% vs. 1Q’24 and vs. -50% consensus and BS(e)). By divisions: Upstream (49% EBIT’24) reached € 458 M vs. € 370 M BS(e) and consensus. Industrial (39% EBIT’24) € 131 M vs. € 190 M BS(e) and consensus; Comercial & Low Carbon (17% EBIT’24) € 136 M vs. € 155 M BS(e) and consensus. NFD totaled € 5.83 Bn and leverage (NFD/ (NFD+ Net Assets)) at 16.9% vs. 14.7% previously. The company reiterated its guidance, even in an adverse scenario.
Separately, yesterday REP announced the sale of a minority stake (46.3%) of a solar and storage asset portfolio in the US (777 MW) for which it will receive €~300 M (~2.5% of market cap / 6% of NFD’24).
We expect a positive impact. In the conference call (10:30 CET) REP should reiterate its priority of shareholder remuneration vs. capex. It should also give more visibility on the guidance, asset rotation and Venezuela.

SANTANDER. 1Q’25 Results very much in line on the operating level. We raise our T.P. by +25%. OVERWEIGHT.
Net Profit came in +9% above expectations due to other provisions (-19% vs. expected level). The group accrued the banking tax worth € 87 M (in line). NPL fell slightly (2.99%). CET1 came in at 12.9% vs. 12.8% in Dec’24. 15.8% ROTE’25 vs. 16.5% guidance. We expect a neutral market reaction to these results. Following the good share price performance seen in the past 3 months (+24% vs. +13% sector) the stock continues to trade at unexpensive levels (1.1x P/TE’25e; 7.3x P/E’25e) for a ROTE’25 >15%. We raise our revenue estimates by +7% on average over the 2025-2027 period, mainly explained by fee revenues. We raise our T.P. by +25% up to € 7.46/sh., meaning an implicit valuation of 8.7x P/E’27 and 1.2x P/TE’27.