EUR 100.00 For Business Accounts Only

IBERIAN DAILY 05 FEBRUARY + 4Q’23 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACERINOX, SANTANDER, UNICAJA.

At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 4Q’23 results to be released over the coming days in Spain.

All eyes on the US macroeconomic data
The main European indices ended with gains, underpinned by the earnings season and by lower core sovereign yields in weekly terms. Thus, despite the good job data released in the US and after Powell dispelled the possibility of rate cuts in the short-term, the market continues to price in a 65% probability of rate cuts in May. Thus, the Eurostoxx50 ended last week in positive territory, returning to near 4,700 points and the Ibex35 rose to near 10,100 points. In the STOXX 600, the best-performing sectors were Automobiles and Travel & Leisure, whereas Telecommunications and Basic Resources ended with the worst relative performance. On the macro side, in Spain January’s unemployment came in far above expectations. In the US, the non-farm job creation provided a positive surprise (353,00 vs. 187,000 expected), which left the unemployment rate at 3.7% and a +0.6% rise in average gain per hour vs. +0.3% expected. In US business results, Aon, Cigna Group and Chevron came in better but Aon worse than expected.
What we expect for today
European stock markets would open flat with a bearish slant. Currently, S&P futures are down -0.19% (the S&P 500 ended +0.15% higher vs. the European closing bell). Asian stock markets are climbing (China’s CSI 300 +1.53%, Japan’s Nikkei +0.54%).
Today in Spain we will learn January’s services PMI, in the euro zone the OECD forecasts and in the US January’s services ISM. In US business results, Estee Lauder, Tyson Foods, Loews, McDonald´s and Caterpillar, among others, will release their earnings.



COMPANY NEWS
ACERINOX, BUY
The company has just announced an agreement to acquire Haynes International (a US group focused on special alloys) for US$ 61.00/sh. (+8.7% premium vs. Friday’s close), meaning US$ 970 M of EV (€ 898 M, 37% ACX’s market cap) and an implicit multiple of 10x EV/EBITDA’24e (vs. 3.4x ACX). The deal is subject to the approval of the US authorities and is expected to be carried out in mid 2024. We believe this is a positive deal on the strategic level, being in line with the company’s comments (growing in the US market), where ACX is the total leader in stainless steel, which should allow it to leverage the growth of this business in the country although the size (and the implicit valuation of Haynes) could generate doubts on the share price.
On the financial level following this acquisition, without assuming any synergies (which have not yet been detailed by ACX), ND/EBITDA’24e would go from 0.5x to 1.5x. The company has announced a conference call at 12:00 (CET) to provide more details on the deal.