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IBERIAN DAILY 28 APRIL + 1Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, CELLNEX, GLOBAL DOMINION, UNICAJA.

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’23 results to be released over the coming days in Spain.

European stock markets ended in the black
The European stock markets ended in the black on the better earnings releases. Within the Euro STOXX, the best-performing sectors were Banks and Industrial, whereas Financial Services and Energy saw the biggest drops (~-3.0%). On the macro side, in Spain, March’s retail sales accelerated unexpectedly, whereas the 1Q’23 unemployment rate climbed somewhat more than expected to 13.3 (albeit employment stands at 1Q’08 highs). Separately, in the 2023-26 Stability Programme, the Govt. is committed to reducing the public deficit to 3% in 2024, one year earlier than in the previous plan. In France, the quarterly GDP accelerated by a tenth in 1Q’23, as expected. In the Euro zone, April’s economic sentiment index disappointed by repeating March’s levels. In the US, weekly jobless claims slowed unexpectedly, whereas March’s pending home sales contracted unexpectedly. Separately, the first reading of the 1Q’23 GDP was disappointing, coming in at 1.1% QoQ annualised dragged down by investment, but with still dynamic private consumption levels. Lastly, the underlying consumption deflator climbed more than expected in 1Q. In Japan, the BoJ kept its monetary policy unchanged. Separately, the unemployment rate climbed unexpectedly, March’s industrial output and March’s retail sales rose more than expected, as did Tokyo’s inflation for April. In US business results, Linde, Intel, T-Mobile, Amazon.com and Caterpillar came in better, Merck&Co and Mastercard in line, Hasbro, American Airlines and Ely Lilly worse.
What we expect for today
European stock markets would open with gains of around +0.5% that would be reeled in throughout a session full of macro data and results. Currently, S&P futures are down -0.13% (the S&P 500 ended +0.78% higher vs. the European closing bell). Volatility in the US fell (VIX 17.03). Asian markets are rising (China’s CSI 300 +0.60% and Japan’s Nikkei +0.96%).
Today we will learn in Spain and Germany April’s preliminary inflation and the 1Q’23 GDP, in the Euro zone the 1Q’23 GDP, and in the US, the cost of employment for 1Q’23, March’s personal outlays, the University of Michigan consumer confidence for March and the Chicago PMI for April. In US business results, Exxon Mobil, Colgate and Chevron, among others, will release their earnings.

COMPANY NEWS

1Q’23 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight Logista (05/05), where we expect a solid set of results thanks to the incorporation of acquisitions and to a positive inventory effect following the tobacco price hikes in France and Italy.

UNICAJA. 1Q’23 Results below expectations due to weakness in NII and impairments. BUY.
The company has obtained € 34 M of Net Profit, ~-33% below expectations, as a result of lower NII (+25% vs. 1Q’23; -2% vs. expected) and higher provisions for repossessed assets (€~10 M above). Revenues fell by -2.5% (-2% vs. expected); costs were reduced by -2.6% (+1% vs. consensus), and Operating Income fell by -2.3% (-6% vs. consensus). Loans and deposits fell by around -3% vs. 4Q’22 (in line; deposit beta of 5%) and loan quality improved, with a CoR below the guidance (26bps vs. 30/35bps). Very good performance in the CET1 ratio, which improved to 13.5% (+50bps) thanks to lower RWAs. We expect a negative share price reaction.

CELLNEX, BUY.
According to the press, CLNX’s Board of Directors will propose Marco Patuano as the company’s new CEO to the AGM (1 June) to replace Tobias Martinez. The appointment will be effective on 4 June. Additionally, the board has agreed to increase the number of directors from 11 to 13 with the appointment of two independent directors (Óscar Fanjul and Dominique D’Hinnin). As a result, the board will have 9 independent directors, 3 proprietary directors (for TCI, Edizione and GIC) and 1 executive director.
Note that Marco Patuano was the non-executive chairman of CLNX between 2018 and 2019, in addition to CEO of Telecom Italia (with 25 of experience in the latter) and Edizion (the Benetton family holding company),
This news does not come as a surprise, as his name has been mentioned as a likely candidate for some time. In fact, during yesterday’s results conference call, the current CEO mentioned that his successor would be known in a matter of days. The stock has risen by +14% (+9% vs. IBEX) since the publication of TCI’s letter on 23 March.