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IBERIAN DAILY 20 APRIL + 1Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, BANKING SECTOR, SACYR, SIEMENS GAMESA.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 1Q’22 results to be released over the coming days in Spain.

The Treasury continues to rise
European stock markets ended with drops after debt curves widened, fuelled by the more hawkish message from some Fed members. Separately, the EU would be once again considering a ban or limitation on Russian oil imports as part of a sixth package of measures as a response to the latest Russian offensive in the east of Ukraine. In the Euro STOXX, Household and Automobiles were among the few sectors ending with gains whereas Real Estate and Financial Services led drops. On the macro level, the IMF’s forecast meeting for April warned about the hurdle of the war in Ukraine for the global economic recovery with cuts in GDP estimates to 2.8% in the euro zone in 2023 (-1.1pp vs. previous level) and 2.3% in 2024 (-0.2pp), and in Spain (one of the least affected in the EU) to 4.8% and 3.3%. The cut was lower in the US, which would grow by 3.7% in 2023 (-0.3pp) and 2.3% (-0.3pp) in 2024. In the US, March’s construction permits rallied above expectations whereas housing starts slowed down slightly less than expected. In China, the market expects measures on interest rates after the PBoC cut the reserves ratio of commercial banks. In US Results, Johnson & Johnson, Prologis and Halliburton beat expectations, as did Netflix (but with disappointing subscriber growth) and Hasbro released worse earnings than expected.
What we expect for today
European stock markets would open with slight gains as a technical reaction following yesterday’s drops, but they could disappear throughout the session on new fears of an interruption to has and oil supplies out of Russia. Currently, S&P futures are down -0.44% (yesterday the S&P 500 ended +0.36% higher vs. the European closing bell). Volatility in the US decreased (VIX 21.37). Asian markets are mixed (China’s CSI 300 -0.7%, and Japan’s Nikkei +0.9%).
Today in the euro zone we will learn February’s industrial output, in the US March’s existing home sales and the Fed Beige Book. In debt auctions: Germany (€ 1 Bn in bonds due 2046). In US Results, Baker Huges, Procter&Gamble and Tesla, among others, will release their results.

COMPANY NEWS

SIEMENS GAMESA. Poor preliminary 2Q’22 Results, 2022 guidance reiterated. Conference call 8:00 (CET). SELL
At yesterday’s closing bell, the company released poor preliminary 2Q’22 Results, very much in line in sales (around € 2.2 Bn) and adjusted EBIT with our estimates although worse than the consensus in the last heading (€ -304 M vs. € -170 M consensus). NFD came in slightly worse (around € 1.7 Bn vs. € 1.6 Bn BS(e)). On another note, the deterioration of the market conditions (inflation in raw materials and energy, logistic disruptions and client delays), along with the more complicated launch of the 5.X platform led the company to reiterate its 2022 guidance (between -2% and -9% in sales and between 1% and -4% adjusted EBIT margin), although suggesting results will remain within the range in sales and at the bottom line in adjusted EBIT margin although this time including € 580 M of revenues in cash (and around 550 of adjusted EBIT) from the sale announced to SSER of its ~3.9 GW in onshore projects under development (to be completed in 2022). Even though the share price has underperformed the IBEX by -27% YTD and awaiting the conference call to be held at 8:00 (CET), we expect a negative reaction.