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IBERIAN DAILY 05 MAY + 1Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACERINOX, ACS, GRIFOLS, LIBERBANK, 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’21 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

The IBEX, the most resilient index against drops
The stock markets posted losses following J. Yellen’s comments in the US, who admitted that interest rates will have to increase slightly to avoid reheating the economy with fiscal stimulus. This affected the Technology sector in particular, and the European stock markets plummeted following a negative US opening, with the IBEX the best relative performer in the euro zone. All the sectors of the Euro STOXX except Construction and Energy closed with losses, with Technology and Autos falling the most (more than -3.0%). On the macro side, in Spain, the Popular Party will govern alone after almost obtaining an absolute majority in the Community of Madrid. In the US March’s factory orders rose less than expected, although durable goods orders were raised. In US business results, Pfizer, Under Armour, DuPont and Sysco beat expectations.
What we expect for today
The European stock markets would open with gains, underpinned by the Technology and Energy sectors, with Brent crude oil nearing US$ 70.00/barrel. Currently, S&P futures are up +0.12% (the S&P 500 ended up +0.81% vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 19.48). The main Asian markets are closed today (China’s CSI and Japan’s Nikkei).
Today in the euro zone and Germany we will learn the final services PMI, in the US April’s ADP employment survey and in Brazil the Central Bank will meet. In debt auctions: Germany (€ 4 Bn in bonds due 2026). In US business results, Pinnacle, Hilton, General Motors, Fox and PayPal, among others, will release their earnings.


COMPANY NEWS

GRIFOLS. Weaker 1Q’21 results in sales but better in margins. We cut our T.P., maintaining our BUY recommendation.
The 1Q’21 results beat expectations on the operating level, (EBITDA -15.5% vs. -18.1% BS(e) and -17.9% consensus) thanks to more favourable margins (25% vs. 23.2% BS(e) and 23.6% consensus), which offset the weaker sales performance (-8.4% vs. -4.3% BS(e) and -5.6% consensus). Following these results, we cut our estimates by -11% in EBITDA and -12% in Net Profit for the 2021-23 period, rolling our model over, with a total impact of -8.9% on the T.P., which falls to € 34.00/sh. (+51% upside). We still think GRF will be a clear winner as vaccination levels rise, and after sliding -21% since the pandemic broke out (-27% vs. IBEX), it is trading at a -51% discount vs. CSL (vs. -27% historically), and, in our view, it has plenty of upside.

LIBERBANK. 1Q’21 results above expectations thanks to core revenues. CoR in line. Net Profit +18% vs. 1Q’20. BUY.
1Q’21 results came in above expectations in all activity margins. The best reading stems rom the positive performance of core revenues that were +5% above expectations. This is explained by the significant commercial dynamism with +9.7% lending growth vs. 1Q’20 and despite the reduction of the customer spread (1.47% in 1Q’20 vs. 1.59% in 1Q’20). The CoR remained in line with expectations, i.e. 55bps without structural deterioration (at 14bps). CET1 saw a good performance, remaining flat vs. 4Q’20 at 14.43% (organic generation alleviates the dividend, regulation and mark to market accrual). With this in mind, Net Profit totalled € 23 M (+18% vs. 1Q’20 and -14% expected). We expect a good market reaction. Conference Call at 11:00 (CET).

UNICAJA. Mixed 1Q’21 results with weak revenues and lower provisions. BUY.
The bank has obtained € 43 M of Net Profit (-6.5% vs. 1Q’20), around +16% above our expectation (+20% vs. consensus) thanks to the better cost performance (-7% vs. 1Q’20 and vs. around -5% expected) and lower provisions (CoR of 52bps vs. 60bps BS(e), with the underlying figure at 31bps vs. 40% upside. In our view, the merger has low execution risk, being the most evident value-enhancing deal in the domestic banking sector. We reiterate our BUY recommendation. Target Price Under Revision.