IBERIAN DAILY 08 NOVEMBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, MÃSMÓVIL, OHL, REPSOL, SACYR.MARKETS YESTERDAY AND TODAY
News in trade negotiations
Global stock markets hit new 2019 highs after China and the US stated they were in favour of gradually withdrawing tariffs, which could be included in phase I of the agreement. In the Euro Stoxx, the best-performing sectors were Travel & Leisure and Basic Materials, with Utilities and Food ending with the worst performance. On the macro side, in Spain the BoS warned of some signs of overvaluation in the real estate market, although it will not raise capital requirements on banks due to the downturn over the past few months. In the presentation of the autumn forecasts, the EC does not expect Spain to meet its 2019-20 deficit targets. In Germany, September’s industrial output fell more than expected. In the UK, M. Carney’s speech was somewhat more dovish, opening the door to increasing stimuli if the macro situation deteriorates. He also criticised expansive fiscal policies as medium-term risks to growth. In the US, weekly jobless claims fell more than expected. In China, both exports and imports fell less than expected, with the trade surplus coming in above expectations in October. In US business results, Ralph Lauren, Walt Disney and Discovery beat expectations, and Westrock was in line.
What we expect for today
Today the markets would see profit taking, with drops of -0.3%. Currently, S&P futures are down -0.14% (the S&P 500 was down -0.39% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 12.79%). The Asian markets that are open are trading with mixed results (Hong Kong -0.72% and Japan +0.26%).
Today, in Germany we will learn September’s trade balance and in the US November’s preliminary U. of Michigan consumer confidence. In US business results, Ameren and Duke Energy, among others, will release their earnings.
COMPANY NEWS
ACCIONA. Results slightly better in EBITDA but worse in debt. SELL.
The company’s 9M’19 results came in better than expected in EBITDA (+1.5% vs. BS(e) and +1.1% vs. consensus) but worse in net debt (€ 5.37 Bn vs. €~5.2 Bn BS(e) and consensus). The rise in debt is due mainly to higher CAPEX levels (which could mean higher growth rates going forward) and, although the NFD/EBITDA guidance of 4x has not been met (4.2x in the last 12 months), the Company reiterates it for the full year. We expect a neutral or very moderately positive market reception since the results beat expectations in EBITDA, we downplay the rise in debt, and the stock has underperformed the IBEX by -9% in the last month (+16% thus far this year).
Acciona is the parent company of a construction group. Co. is engaged in general construction activities in the areas of civil engineering and buildings, including railways, marine and hydraulic works, motorways and airports, town planning, conduits, pavements, parking lots, and industrial and urban buildings. In addition, Co. is engaged in the provision of real estate services, the operation of parking lots, telecommunications, services, ecology and alternative means of energy. Co.'s operations are organized in six business divisions: Infrastructures, Real Estate, Energy, Water, Environmental & Urban Services and Logistic & Transport Services.
Masmovil Ibercom SA, formerly World Wide Web Ibercom SA, is a Spain-based company primarily engaged in the telecommunication sector. The Company focuses on the sale and distribution services for Internet, Data Center and Telecommunications. The Company's product and services portfolio comprises Internet access through Asymmetric Digital Subscriber Line (ADSL) and Symmetric Digital Subscriber Line (SDSL) technologies, Internet domains and Domains Management and Registration Service through IberDNS application, Web hosting, virtual servers, dedicated servers, telephony services and routers. The Company also offers collocation services through two Internet Data Centers located in Madrid and San Sebastian. It operates through subsidiaries, such as Embou Nuevas Tecnologias SL and Ebesis Sistemas SL, among others. The Company owns a number of brand names, such as Pepephone, Yoigo and Llamaya.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
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