EUR 100.00 For Business Accounts Only

IBERIAN DAILY 08 APRIL (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ATRESMEDIA, GRIFOLS, MEDIASET ESPAÑA, RED ELÉCTRICA.


MARKETS YESTERDAY AND TODAY

Profit taking on the markets
European stock markets ended with slight drops after the EMA warned that the doubts surrounding AstraZeneca’s vaccine could slow the pace of vaccinations, which would delay normalisation of business activity. Thus, in the Euro STOXX we saw a session in which Consumer Goods and Real Estate posted the biggest gains, offsetting part of the worse relative performance over the past few days. By contrast, Travel & Leisure (hardest hit by risks on movement) and Technology ended with the biggest losses. On the macro side, in Europe March’s final services PMI substantially improved on the preliminary data, suggesting growth above the -4.2% YoY expected by the consensus. In the UK, March’s final services PMI was disappointing, falling -0.5%. In Brazil, March’s inflation came in below forecasts, despite rising. In the US, the Fed’s meeting minutes showed a dovish slant despite the recovery, with most members believing long-term targets are still far from being met, and thus there will continue to be monetary support through purchase programmes and zero rates until at least 2022. As for macro data, February’s trade balance saw the deficit grow more than expected. Separately, Biden’s administration has proposed a new global tax model whereby each company pays taxes according to their sales in each country, setting a minimum global tax. Separately, the IMF has also proposed a new temporary tax on the rich and large companies.
What we expect for today
The commitment with stimulus in the Fed minutes could underpin gains although the sectors more linked to mobility, such as Travel&Leisure, would see a worse performance, as the lower vaccination pace is arising doubts. Currently, S&P futures are up +0.45% (the S&P 500 ended practically unchanged vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 17.16). Asian markets are trading with mixed results (China’s CSI 300 +0.1% and Japan’s Nikkei -0.2%).
Today in Europe we will learn the ECB’s meeting minutes, in Germany February’s factory orders and in Mexico March’s inflation. Debt auctions: Spain (€ 7 Bn in bonds due 2026, 2028, 2044 and I/L 2033) and France (€ 11 Bn in bonds due 2029, 2052 and 2031).


COMPANY NEWS

ATRESMEDIA/MEDIASET ESPAÑA. We raise our estimates and T.P., reiterating our BUY recommendation in both.
We raise our estimates to include our more upbeat stance on the TV advertising market. Although 2021 is not following the trends seen in 4Q’20, we expect a better outlook starting in 2Q’21 (which provides an “easy” comparison), and we now forecast +8% in 2021 and a +2.6% CAGR’20-23e vs. +3% and -0.5% previously. Despite the good performance of both share prices since October’20 (+72% TL5 and +59% A3M in absolute terms and +46% and +33% vs. IBEX), we believe that the rerating may continue, as both companies are trading at very appealing ratios (~9x P/E’21e vs. ~17x historical average), generating significant cash (>10% FCF’21e yield). We raise our estimates and valuation for both companies: new T.P. for TL5 at € 7.00/sh. (+49% vs. previous T.P and +41% upside) and that of A3M at € 4.50/sh. (+50% vs. previous T.P. and +31% upside). We maintain our bet on TL5, as it has higher upside potential and greater capacity to cut costs (higher margin) and generate cash, making it a more defensive option.