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IBERIAN DAILY 08 APRIL (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, AEDAS, NEINOR, REPSOL.


Sharp drops on stock markets after China’s response to Trump’s tariffs
Donald Trump’s announcements of tariffs led to widespread losses in global stock markets after a minimum global tariff of 10% was announced for all goods imported to the US and specific rates were set for a list of countries, among them 20% for Europe and an additional 34% for China. In this regard, the market is awaiting Europe’s response after China imposed tariffs on Friday. In the STOXX 600, the sectors with the smallest drops were defensive and bond proxies, led by Utilities, Household Goods and Food. By contrast, the biggest drops came in cyclicals like Basic Materials, Banks and Energy. On the macro side, in the US January’s job creation easily beat expectations (228,000 vs. 135,000 expected), although the previous data was lowered (from 151,000 to 117,000), the unemployment rate rose +0.1% to 4.2% and salary gains slowed slightly more than expected, to 3.8% from the previous 4.0%. In China, the Govt. would be mulling the possibility of moving forward the announcement of stimulus measures in order to counteract the impact from US tariffs. In tariff news, Elon Musk expects the opening of an area of free trade between the US and Europe.
What we expect for today
Stock markets would open with drops > -4.0%, with cyclical groups severely hit once more although the short-term overselling should moderate losses during the session. Currently, S&P futures are down -3.10% (the S&P 500 ended -1.83% lower vs. the European closing bell). Asian markets are falling (China’s CSI 300 -7% and Japan’s Nikkei -6.56%).
Today in the euro zone we will learn February’s retail sales and April’s Sentix index and in Germany February’s industrial output.


COMPANY NEWS

REPSOL. Poor 1Q’25 Trading statement due mainly to industrial. OVERWEIGHT.
Despite the improvement seen in some operating headings vs. 4Q’24, particularly in Upstream, with better HH prices (up to US$ 3.70/MBtu, vs. 2.8 prev. vs. 3 guidance), Brent levels (US$ 75.70/b vs. US$ 74.70/b prev. vs. US$ 75.00/b guidance, vs. 70 BS), appreciation of the euro or recovery of Libya. However, the strong drop in refining distillation utilisation and conversion, the weakness of biofuels and other effects (water from Mexican crude oil) tarnish the slight improvement of refining margins (to US$ 5.30/b vs. 4.80 4Q’24, vs. 6.00 guidance, 5 BS). Even though output falls to 540 kboe/d vs. 554 kboe/d in 4Q’24 it would be in line with the guidance and BS. In its 1Q’25 Results (30/04), we foresee around € 630 M of adjusted Net Profit (-2% vs. 4Q’24), below the consensus (-6%). Beyond the share price reaction today, REP has slid -17% since D. Trump’s tariff announcement (-13% Brent crude over the same period), widely pricing in this poor trading update.