EUR 100.00 For Business Accounts Only

IBERIAN DAILY 02 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, AMADEUS, CIE AUTOMOTIVE, METROVACESA, NATURGY.


MARKETS YESTERDAY AND TODAY

December kicks off with gains
European markets climbed +1%, underpinned by the good leading activity data released in China and Europe, while the approval of Pfizer’s vaccine is expected in the euro zone on the 29th of December and Moderna’s on the 12th of January. In the Euro STOXX, value sectors such as Basic Resources and Banks were the best performers while Household and Utilities were the only industries ending in negative territory. On the macroeconomic level, in the euro zone, the final manufacturing PMI improved slightly, remaining at high levels. On another note, November’s inflation was in line, although the recovery of Brent prices should lead it to positive levels in the 1Q’21. In Germany, November’s unemployment fell unexpectedly and the previous data was raised. From the ECB, C. Lagarde stated that the economy is still affected, despite the fact that the second coronavirus wave is beginning to slow, and thus monetary tools will have to be recalibrated. In this regard, M. Kazaks was in favour of extending the PEPP by 12 months and increasing it by € 500 Bn, extending TLTROs to 5 years and making collateral more flexible. In the US, November’s manufacturing ISM dropped more than expected, with the job component falling sharply, although it continues to suggest dynamic activity levels in the 4Q’20 (4.0% q/qa expected). Separately, talks to unblock the fiscal package during 1Q’21 continue (proposed in the Senate for fiscal spending of US$ 0.9 Tn, a third for SMEs and ~20% to complement unemployment subsidies that expired in Sep’20), whereas J. Powell warned Congress of the risks of new outbreaks on recovery. As for the global economy, the OECD forecasts suggest a -5.5% slowdown in the global activity of developed economies in 2020 that will not be offset in 2021 (3.3%) and 2022 (3.2%), with Spain as the second-most affected economy due to the drops (-11.6% in 2020, followed by 5% in 2021 and 4% in 2022).
What we expect for today
We expect a session of mixed performance backed by the forecast of greater monetary and fiscal stimuli. Currently, S&P futures are down -0.22% (the S&P 500 closed down -0.3% vs. its price at the closing bell in Europe). Volatility in the US decreased (VIX 20.77). Asian markets are trading with mixed results (CSI 300 -0.15%, Japan +0.05%).
Today in Spain we will learn November’s unemployment, in the euro zone October’s unemployment rate, and in the US November’s ADP survey and the Fed Beige Book. In debt auctions: France (€ 6.5 Bn in bonds due 2032, 2036, 2041 and 2048), Germany (€ 2 Bn in bonds due 2025) and Greece (€ 600 M in 6M T-bills).


COMPANY NEWS

AMADEUS. Even with the vaccine, there is a long journey ahead. We change to SELL.
The share price has soared +43% in absolute terms in the past month (+18% vs. IBEX), fuelled by the predictable availability of highly effective vaccines, already pricing in a recovery consistent with our central case scenario (we expect it to recover 2019 EBITDA levels in 2023). The closures linked to Covid-19 outbreaks have throttled the recovery we expected for 4Q’20, and thus we cut our EBITDA’21-15 estimate by -3%. Notwithstanding, we forecast less Capex’25-25e (-5%) and raise our T.P. to € 59.00/sh. (+4% vs. previously). Thus, given the lack of upside (-1% potential), we change our recommendation to SELL. To obtain additional +10% upside, we would have to assume normalised EBITDA levels +25% above those from 2019, which would mean an even faster recovery of revenues (which does not quite seem reasonable given the current uncertainties).