EUR 100.00 For Business Accounts Only

IBERIAN DAILY 02 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, CAF, CELLNEX, FERROVIAL, INDITEX, MAPFRE.

December kicks off with gains
Despite the gains on the stock markets, C. Lagarde expressed worries on inflation and the need to keep it in check. From the Fed, J. Williams also spoke of the need to raise rates further. In the Euro STOXX, Technology and Telecoms were the best performers, with Real Estate and Insurance falling the most. On the macro side, in the euro zone October’s unemployment rate fell unexpectedly to 6.5%, whereas November’s final manufacturing PMI was cut. In the US, November’s manufacturing ISM fell more than expected, now in territory consistent with falling activity levels for the first time since June’20. October’s construction spending fell more than expected and real personal outlays rose more than expected. In China, the Governor of the PBoC announced an accommodative policy to maintain growth, also expecting a relaxation of Covid-19 restrictions.
What we expect for today
The European stock markets would see a bearish opening awaiting the US employment data. Currently, S&P futures are down -0.1% (the S&P 500 ended up +0.14% vs. the European closing bell). Volatility in the US rose (VIX 21.85). Asian markets are falling (China’s CSI 300 -0.48% and Japan’s Nikkei -1.6%).
Today in Spain we will learn November’s employment creation, and in the US non-farm employment, unemployment rate and wage earnings (all for November).


COMPANY NEWS

INDITEX. Solid 3Q’22 results, but all eyes will remain on the trading update. BUY
We expect solid 3Q’22 performance (results to be released on 14/12), with LfL sales growing around +8% in a quarter that will end worse than it began (demanding comparison, closures/restrictions and unfavourable weather conditions) and with a positive impact from price increases (around +5%). Although there will be pressure on the gross margin (around -70bps to ~60% due to rising procurement costs), the deterioration of the EBIT margin will be limited (around -20bps to 21.6%). All eyes will be on the trading update (Nov-Dec), where we expect indications and confirmation of the guidance (+/-50bps on gross margin), which is important following the +15% recorded since 2Q’22 results (+12% vs. IBEX and +5% vs. sector).

CAF. 2026 Strategic Plan: Higher growth in the long term in exchange for bigger investments. BUY
On the strategic level, the main new points of the plan would be Solaris’s expansion into North America and into the zero-emission interurban segment in Europe. On the financial level we highlight much higher growth than expected in the long term (sales’26 +20% above estimates), with somewhat higher margins than we expected (+60bps in EBIT’26) and in line with the consensus. This means heavier investments, such that the positive impact on the T.P. (assuming the plan) would be irrelevant (less than +5%). In any event, the plan loses some impact because it does not provide intermediate targets. Yesterday CAF rose +1.8% vs. the IBEX, and on the year it has underperformed the IBEX by -18% (+54% upside) and is trading at 5.8x EV/EBITDA’23e (-35% discount to the sector average, -22% vs. Talgo and -29% vs. Alstom).

CHANGES IBEX 35. Technical Advisory Committee announces Siemens Gamesa’s exclusion from the IBEX.
On 14 December (adjustments at the closing bell on 13/12) Siemens Gamesa will be excluded from the IBEX, which will temporarily comprise 34 stocks. Once the result of the TOB on the company has been officially released (TOB ends on 13/12), the Committee will hold an extraordinary meeting in December to decide whether to include Siemens Gamesa on the index once again, with the new applicable coefficient, or to replace it with another stock. The stock to be included on the IBEX 35 will enter effectively on the 27th of December, 2022. These measures are subject to compliance with the acceptance period of the TOB. We understand that in the 12/12 meeting there will be no changes made, although if any were to be made the candidate for exclusion would be Pharmamar. If this change were to come about, a new inclusion would be necessary, and the main candidate to enter is Logista, followed by CIE and Almirall.