EUR 100.00 For Business Accounts Only

IBERIAN DAILY 21 JULY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, ACCIONA, CELLNEX, GRIFOLS, LAR.

MARKETS YESTERDAY AND TODAY

The white smoke signal was finally seen
Slight gains on most European stock markets, with all eyes on the outcome of the meeting of 27 member states in Brussels, where a historic agreement was finally reached. The recovery fund will total € 750 Bn and the common pluriannual budget € 1.07 Trillion (vs. 1.1 initially). The payments will be allocated as follows: € 390 Bn in transfers and € 360 Bn in loans, where € 250 Bn will be earmarked to climate change. Within the Euro STOXX, the best-performing sectors were Technology and Financial Services, whereas Travel & Leisure and Energy were the worst relative performers with markets fuelled by the progress of new Covid-19 vaccines (that of Astrazeneca would generate an immune reaction). On the macro side, from the ECB, Luis de Guindos stated that he expects to see European bank mergers shortly and that the 2Q’20 GDP in the region could see a slighter drop than initially expected (-13%). In the US, negotiations between democrats and republicans on a new tax package (around US$ 1 Trillion) are apparently complicated. On another note, the US would have added 11 Chinese technological and energy companies to the restricted list in the US. In Japan, June’s inflation was in line with expectations, although the core component came in slightly better. In US business results, Halliburton and Manpower beat expectations, whereas Cal-Maine Foods released worse earnings than expected.
What we expect for today
The European stock markets would open with gains in response to the good news from the EU front on the European deal and the promising results of Oxford’s Covid-19 vaccine. Currently, S&P futures are up +0.24% (the S&P 500 was up +0.46% vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 24.46%). Asian markets are climbing (Japan +0.8% and Hong Kong +1.9%).
Today in the US we will learn June’s Chicago Fed index. In US business results, Coca Cola, Philip Morris and Prologis, among others, will release their earnings. As for auctions, Germany will issue € 4 Bn in 2Y bonds.


COMPANY NEWS

CELLNEX. Good results in line with expectations. Guidance raised to include Arqiva and NOS. BUY.
The results were in line with expectations, with EBITDA growing by +64.8% in 2Q’20 and RLFCF (Recurrent Levered FCF) totalling € 267 M in the 1H’20 (+54% and +6.9% organic vs. 1H’19), which shows the robustness of the business and its high visibility, maintaining the growth rates registered before Covid-19. The company has raised its guidance’20 to € 1.16-€-1.18 Bn (around +70% vs. € 1.06-€1.08 Bn previously and vs. € 1.11 Bn BS(e) and € 1.13 Bn consensus). Likewise, it expects RLFCF to increase by >70% (vs. >50% previously and vs. +57.5% BS(e)). We do not expect a significant market impact following the stock’s recent good performance (+49% in absolute terms in 2020 and +70.7% vs. Ibex). The key will lie in the messages that the company may provide in the conference call (22 Jul at 18:30 (CET)) on the pipeline of inorganic operations and rumours on the € 3 Bn rights issue.