IBERIAN DAILY 18 JUNE (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, AENA, IAG, MERLIN PROPERTIES, SIEMENS GAMESA.MARKETS YESTERDAY AND TODAY
Calm on the markets
European stock markets had a relatively calm session after the recent ups and downs. The IBEX, bringing up the rear in Europe, fell in view of the threat of a second wave of new outbreaks. In the Euro STOXX, Technology and Retail were the best relative performers vs. Autos and Insurance, which fell the most. On the macro side, in the euro zone and the UK, May’s final inflation came in at 0.1% and 0.5% YoY, respectively. From the ECB, Luis de Guindos welcomed the community aid plan and stated that the economy has hit a floor after signs of recovery were seen. Meanwhile, in France the Statistics Institute (INSEE) raised its forecast for 2Q’20 GDP to -17% from the previous -20%. In the US, May’s housing starts and building permits rose less than expected. From the Fed, J. Powell urged Congress not to withdraw fiscal support of households and small businesses too quickly. Separately, Trump’s Govt. suspended talks with Europe as it is opposed to a tax on tech, threatening with retaliation if taxes are imposed unilaterally. In Brazil, the Central Bank cut the interest rate, as expected, to 2.25% from the previous 3.0%. In China, hotels in Peking were forced to shutter.
What we expect for today
In Europe the markets would open with losses of more than -1.0% with cyclical sectors like Energy and Tourism hit hardest. Currently, S&P futures are unchanged (the S&P 500 closed down -0.46% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 33.47%). Asian markets are falling (Japan -0.37% and Hong Kong -0.22%).
Today in the euro zone we will learn the ECB’s monthly report, in the UK the BoE meeting and in the US June’s Philadelphia Fed index and weekly jobless claims.
COMPANY NEWS
SIEMENS GAMESA. Predicts negative adjusted EBIT’20 and appoints a new CEO. SELL.
The company announced at yesterday’s closing bell that as a result of Covid-19 it foresees negative adjusted EBIT in the 3Q’20 and that the predictable positive EBIT in the 4Q’20 will not be sufficient to offset the negative EBIT accumulated through the 9M’20 (vs. € 332 M BS(e) in 2020 and € 335 M consensus). On another note, the company made public the appointment of Andreas Nauen (currently the head of the offshore business) as new CEO. The group will hold a conference call today at 8:00 (CET) and its CMD on 27/08. Assuming zero adjusted EBIT’20 (and keeping the rest unchanged), the impact on our T.P. would be at least -3%, as we keep the improvement from that date unchanged (EBIT’21e € 705 M), and thus the reasons behind this cut at the conference call will be key. With this in mind, SGRE would yield a -20% potential, and we maintain our SELL recommendation.
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.
Aena SME SA, formerly Aena SA, is a Spain-based company primarily engaged in the airports operation. Its activities are divided into four segments: Airports, which comprises Aeronautical subdivision, responsible for the management of airports, jetways, security, handling, cargo and fuel services, among others, as well as Commercial subdivision, including duty-free and specialty stores, restaurant services, car rental, as well as banking services and advertising; Services outside the terminal, which manages real estate assets, such as parking lots, warehouses and lands; International, which comprises operations of Company's subsidiary, Aena Desarrollo Internacional SA, that invests in other airport owners principally in Mexico, Colombia and the United Kingdom; and Others, encompassing corporate activities. It manages tourism, hub and regional airports, as well as heliports and general aviation areas. Furthermore, its destination range comprises Europe, the Americas, Asia and Africa.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Merlin Properties SOCIMI SA is a Spain-based company engaged in the operation of a real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties located in the Iberian Peninsula, primarily in Spain. The Company's activities are divided into the following segments: Office buildings, operating a portfolio of office space; High-street retail, engaged in leasing retail stores; Shopping centers, engaged in managing department stores; Logistics, operating logistics warehouses and distribution centers, and Others. The Company's other activities include property management services rendered to third parties.
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