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IBERIAN DAILY 10 FEBRUARY + 4Q’21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA ENERGÍA, ACS, ARCELOR MITTAL, TELEFÓNICA.

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 4Q’21 results to be released over the coming days in Spain.

The IBEX erases its annual losses
Gains resumed in stock markets ahead of today’s inflation data in the US, with growth outperforming value, and with the peripheral segment standing out in a session of heavy gains. The Ibex35 exceeded 8,800 points with debt interests and oil halting its rise and with the tense calm of Ukraine’s crisis. Thus, in the Euro STOXX, all sectors ended with gains, led by Automobiles and Industrials vs. the worse relative performance of Consumer Goods and Household. On the macro side, in Brazil and Mexico, January’s inflation climbed in line with expectations. In Spain, the government decided a 3.6% increase in minimum wage up to € 1,000/month. On another note, yesterday Mexico’s president, López Obrador stated that the relationship with Spain is not in the right road and that they should take a break, specifying the contracts of OHLA in the country (1.7% of its sales in Mexico, but 26% controlled by the Mexican family Amodio), Repsol (250 petrol stations, 5% of the total, and some oil finding) and BBVA (40% Net Profit) With this in mind, no specific measure was given (Iberdrola is also present in the country, where it generates 9% of its EBITDA). In the US, from the Fed, Mester showed her confidence in a reduction of inflation by the end of the year, supporting MBS sales to reduce the balance sheet whereas Bostic estimates 4 rises of 25bps in 2022. In US business results, Fox, Uberand Walt Disney beat forecasts with better subscription data in the latter.
What we expect for today
European stock markets would trade within a narrow range, awaiting US inflation data. Currently, S&P futures are flat (the S&P 500 was up +0.34% vs. the European closing bell). Volatility in the US fell (VIX 19.96). Asian markets are trading with mixed results (China’s CSI 300 -0.53% and Japan’s Nikkei +0.42%).
Today in the US we will learn January’s inflation and weekly jobless claims and in Mexico the Central Bank Meeting. In US business results, Cocacola, PepsiCo, Twitter, Kellogg and Moodys among others, will release their earnings. In debt auctions: Italy (€ 6 Bn in 12M T-bills).

COMPANY NEWS

ARCELOR MITTAL. Results beating expectations in EBITDA. Positive tone for 2022. BUY.
The Results beat expectations in EBITDA (US$ 5.05 Bn vs. US$ 5.08 BS(e) and US$ 4.94 Bn consensus) due to the good delivery levels, and the recovery of production (which affected the 3Q) in most regions. Despite this, as expected, 4Q’21 came in -16.7% below 3Q’21 but remains at very high levels (more EBITDA was generated in 4Q’21 than in all of 2020). Moreover, the outlook continues to be positive (+3% growth in deliveries vs. FY2021) and robust EBITDA and FCF for 2022. Lastly, MTS announced a US$ 1 Bn buyback scheme (3.1% of the market cap), to be executed in the 1H’21, and a dividend of US$ 0.38/sh. (1.1% yield).