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IBERIAN DAILY 04 MAY + 1Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACS, ECOENER, GREENALIA, METROVACESA.

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’22 results to be released over the coming days in Spain.

Awaiting the Fed meeting
The beginning of the easing of the Shanghai lockdown and moderation in debt curves gave some respite to the European stock markets, which rallied led by the Ibex 35. Within the Euro STOXX, the best-performing sectors were Energy and Banks (underpinned by the sector’s earnings presentations), with rises of around +3%, whereas Consumer Goods was the only sector that ended in the red, and Chemicals saw the smallest rise. The EU continues to negotiate an agreement on Russian oil, Hungary is against cutting off supply and all options are considered, including that those countries unable to give up Russian oil will continue buying. As for macro data, in the Euro zone, April’s production prices climbed above expectations and continue to hint at a rising inflation in 2Q’22. On another note, I. Schnabel (member of the ECB’s Executive Committee) was in favour of raising rates in July and of starting the reduction of the balance sheet. In the US, durable goods orders and core capital goods beat the preliminary figure. In US business results, DuPont came in better than expected, Hilton Worldwide and Pfizer were in line and Estee Lauder and Biogen were disappointing.
What we expect for today
European stock markets would open flat, with a slight bullish slant in a session marked by the Fed meeting. Currently, S&P futures are up +0.1% (yesterday the S&P 500 ended down -0.38% vs. the European closing bell). Volatility in the US decreased (VIX 29.25). Asian markets are closed.
Today the Fed will hold its meeting. Also, in Spain we will learn April’s unemployment rate, in Germany March’s trade balance, in the Euro zone March’s retail sales, in Mexico April’s consumer confidence, and in the US, April’s ISM non-manufacturing index, April’s ADP private employment and March’s trade balance. In US business results, CVX Health, Trane Technologies, Moderna and eBay, among others, will release their earnings. In debt auctions: Germany (€ 1.5 Bn in bonds due 2031).

COMPANY NEWS

METROVACESA, BUY
The results were in line with expectations, with the solid presales standing out, as they hit a quarterly record for the company (568 units, including only BtS). The improvement to the international market on the Costa del Sol, where MVC has exposure, is one of the keys to the strong presales performance.
Sales: € 141.1 M (+81.1% vs. +80.9% BS(e)); EBITDA: € 15.6 M (+3800% vs. +3450% BS(e)); Net Profit: € 10.7 M (€ -2.2 M in 1Q’21 vs. € 8.76 M BS(e)).
MVC has reiterated its targets for 2022, when ~85% of forecast deliveries would already be sold. The company also mentions that it is raising prices in many developments in order to offset the increased construction costs (which it expects to reach +10% in 2022).
Although the results are in line with what we expected, we should point out that they are solid, confirming the strong underlying demand in the sector. We reiterate our BUY recommendation. Note that there is currently a TOB from FCC for 24% of MVC’s capital at € 7.80/sh., which we recommend not accepting because we feel it is low. The doubt is whether there will be an improvement. If there is not, and depending on the acceptance rate of the bid, free float and liquidity could be even lower than the current levels.