EUR 100.00 For Business Accounts Only

IBERIAN DAILY 23 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, IBERDROLA, TELEFÓNICA.

The Ibex resists
It was a session of moderate losses in Europe, with the IBEX (along with the DAX) showing the best relative performance, near highs. In the STOXX 600, the defensive sectors Food and Utilities fell the most, with the best performers being Retail and Basic Materials. On the macro side, in the UK, the final 3Q’25 GDP confirmed the preliminary 1.3% YoY. In the US, the Chicago Fed activity index fell more than expected. From the Fed, Miran warned that rates may be caught in order to avoid the risk of a recession. In Mexico, October’s IGAE activity index rose more than expected. In geopolitics, China placed tariffs of between 22% and 43% on dairy products from the EU. The US-Venzuela tension continued to rise after Trump recommended Maduro resign.
What we expect for today
European stock markets would open mixed after a flat session in Asia. Currently, S&P futures are falling slightly (the S&P 500 ended +0.2% higher vs. the European closing bell). Asian markets are flat (China’s CSI 300 +0.0%, Japan’s Nikkei +0.02% and Korea’s Kospi +0.28%).
Today in Spain we will learn the final 3Q’25 GDP, in the US the second reading of the 3Q’25 GDP, December’s Conference Board consumer confidence, November’s industrial output and October’s durable goods orders.

COMPANY NEWS

ELECTRICITY SECTOR. CNMC approves 2026-31 electricity remuneration circulars
The CNMC approved the four circulars on electricity remuneration for 2026-31 at the eleventh hour, keeping the Financial Remuneration Rate (FRR) at 6.58% (vs. 7.0%-7.5% requested by the sector). To adhere to the State Council’s ruling, on the distribution circular the CNMC raised remunerable investments to 100% of the limit of 0.13% of GDP (vs. 80% previously) and reformulated the sustainability mechanism, limiting it to investments linked to demand and included in the planning currently being processed. The CNMC would have decided to approve non-essential changes in the circular on distribution remuneration in order to avoid the automatic extension to the current framework. The biggest impacts in our coverage universe would be on Endesa, where the lower FRR, all things remaining equal, would mean around a -10% cut to our T.P. to around € 26/sh., leaving -8.5% upside; we maintain our UNDERWEIGHT recommendation). Redeia would also be affected with an impact of around -8% on the T.P. to around € 18.70/sh., leaving +24% upside and where we maintain our OVERWEIGHT recommendation.