EUR 100.00 For Business Accounts Only

IBERIAN DAILY 16 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACS, FERROVIAL INDITEX, MEDIASET ESPAÑA, NATURGY.

The Ibex remains in positive territory
European stock markets recovered progressively, awaiting the talks between Russia and Ukraine. In this regard, V. Putin mentioned that Ukraine is not being serious in finding acceptable solutions, whereas Ukrainian officials do see progress in the negotiations. In the Euro STOXX, Autos and Media led the gains, while Basic Materials and Household Goods fell the most. On the macro side, in the UK the ILO unemployment rate for January fell more than expected. In Germany, March’s ZEW economic sentiment index contracted more than expected (largest drop on record) to near pandemic levels. From the ECB, L. de Guindos stated that the normalisation of the asset purchase programme will not entail raising rates immediately. In the US, production prices once again rose in February, whereas March’s Empire manufacturing index unexpectedly fell into negative numbers. In Japan, January’s final industrial output improved vs. the preliminary data. In China, the Govt. has committed to stabilising financial markets and being more proactive with fiscal and monetary stimuli.
What we expect for today
European stock markets would open with gains, fuelled by the rally in China and ahead of the Fed meeting. We expect a better performance of Energy, after crude oil recovered to US$ 100/barrel, and Technology, due to the rally in China. Currently, S&P futures are up +0.60% (yesterday the S&P 500 ended +0.8% higher vs. the European closing bell). Volatility in the US dropped (VIX 29.83). Asian markets are climbing (China’s CSI 300 +4.05%, and Japan’s Nikkei +1.6%).
Today the Fed will hold its March meeting, in the US we will learn February’s retail sales, January’s business inventories and March’s NAHB real estate confidence index and in Brazil the BoB’s Selic interest rates meeting. In debt auctions: Germany (€ 4.0 Bn in bonds due 2032).

COMPANY NEWS

INDITEX. Poor 4Q’21 Results and below expectations although the 1Q got off to a better start. BUY.
Our first impression is that the 4Q’21 Results are poor already from the sales heading: Sales: € 8.391 Bn (+33% vs. +40% BS(e) and +37% consensus); EBIT: € 989.7 M (+76% vs. +172% BS(e) and +174% consensus). Sales deteriorated significantly in the second half of the quarter (due to Omicron, according to the company) whereas operating costs grew substantially, with sales and EBIT falling -1% and -19%, respectively, vs. the same quarter in 2019. On the positive side, the start to 2022 was positive, with +21% sales growth at constant exchange rate (the contribution from Russia and Ukraine was 5pp), foreseeing a +/-50pbs gross margin vs 2021. ITX proposes a € 0.93/sh. DPS (+33% vs. 2020 vs. € 1.01 BS(e)) and a € 0.40/sh. extraordinary dividend against 2022 results (€ 0.20 BS(e)).

MEDIASET ESPAÑA. TOB from Media For Europe (MFE). BUY.
MFE is going to submit a takeover bid on the 44.3% stake in TL5 it does not own, in which it will offer 4.5 MFE (Class A) shares for every TL5 share plus € 1.86 in cash, which in total equals € 5.67 per TL5 share (67/33 shares/cash). The premium offered is +10.7% vs. yesterday’s closing prices, but the bid stands -13% below the “separation right” in cash offered to TL5 shareholders in 2019 (and -14% vs. the consensus’ target price). The TOB is “voluntary”, not requiring the price to be considered “fair”, and is subject to a 90% acceptance level of the shares targeted by the offer (39.88% of TL5’s share capital). It is complicated to assess the offer, as it is mostly in MFE shares (the consensus’ target price assumes +18% upside), but we believe that an improved offer is unlikely. We expect a positive share price reaction today.