IBERIAN DAILY 11 NOVEMBER + 3Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACS, BANKING SECTOR, CAF, CELLNEX, GRIFOLS, MEDIASET ESPAÑA, MERLIN PROPERTIES, TALGO.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 3Q’22 results to be released over the coming days in Spain.
Inflation begins to give hope
The positive surprise in the US inflation data led the European stock markets to post gains of over +3.0%, with a remarkable performance of growth stocks. Within the Euro STOXX, the best-performing sectors were Technology and Real Estate, whereas Household Goods and Energy ended in negative territory. On the macro side, in the US October’s inflation and core inflation (7.7% YoY and 6.3% YoY, respectively) slowed more than expected thanks, especially, to the health and auto sectors. In Brazil, October’s inflation slowed somewhat less than expected (to 6.5% vs. 7.2% previously), but it hints at the start of possible rate cuts. In Mexico, the BdM raised, as expected, rates by +75bps to 10.0%. In China, the Govt. reduced quarantine time for travellers and close contacts, among other measures. In US business results, Ralph Lauren was in line, whereas WestRock disappointed.
What we expect for today
European stock markets would open with gains of up to +1.0%, with cyclical stocks and companies exposed to China performing well in view of the news of restrictions being eased.
Currently, S&P futures are up +0.5% (the S&P 500 ended +0.71% higher vs. the European closing bell). Volatility in the US decreased (VIX 23.53). Asian markets are rising (China’s CSI 300 +3.2% and Japan’s Nikkei +2.98%).
Today we will learn in Germany October’s final inflation, and in the UK the 3Q’22 GDP. In US business results, Tyson Foods, among others, will release its earnings. In debt auctions: Italy (€ 7.5 Bn in bonds due 2029, 2026 and 2048).
COMPANY NEWS
3Q’22 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight Colonial (16/11), where we expect a good set of results that should show strong positive momentum in revenues and recurring EBITDA thanks to the indexation of rents and the incorporation of assets into the scope of consolidation.
GRIFOLS. Update after 3Q’22 Business Update. We cut our T.P. -26% and maintain our BUY recommendation.
Following the release of the 3Q’22 Business Update, we cut our estimates by -6% and -29% in EBITDA and Net Profit’22-24 in order to reflect slower margin recovery and higher financial costs, bringing our estimates -7% and -20% below the consensus. We lower our T.P. by -26% to € 20.00 (+102% upside) after also rolling our model over and raising the WACC by +130bps. GRF has fallen -40% since the 1H’22 results due to its high debt level (8.6x NFD/EBITDA) and is trading at ~11x EV/EBITDA’23 (-44% vs. CSL), which we see as unjustified, and we still think the progressive operating recovery (+22% CAGR’22-24 in EBITDA) and the reduction to debt (organic and inorganic) will open the door to a rerating.
MERLIN. Solid 3Q’22 results in line with expectations. BUY.
Solid 3Q’22 results in line with our forecasts: Gross rental revenues +8% (+8% BS(e)) thanks to indexation (CPI), improved occupancy and project deliveries. LfL rents +7%. Cash generation grew more than gross rents due to the lower incentives given to tenants (gross rents +8%, net rents +17%) and FFO grew +11% to € 0.48 (in line with our estimate). This quarter there is no asset appraisal, NAV is € 16.50/sh. (+5%) and LTV stands at 31%. The company has announced the payment of € 0.20/sh. (+33%, vs. € 0.20 BS(e), 2.2% yield) as an interim dividend on 02/12. Total ordinary DPS’22e € 0.45/sh. (+12% vs. 2021, 4.9% yield).
CELLNEX. Results in line with expectations; guidance’22 reiterated. BUY.
The company has released 9M’22 results in line with expectations both in sales and in EBITDA, confirming its targets for 2022, which are in line with ours. It announced an interim dividend’22 of € 0.035/sh. CLNX reiterates its commitment to obtaining the Investment Grade status from S&P. We expect a positive share price reaction, as the stock has fallen by -30% YTD.
TALGO. BUY.
At the closing bell the company released better 9M’22 results in sales (-17.5% vs. 9M’21; +3.6% vs. consensus) and adjusted EBITDA (-22.7%; +3% vs. consensus) and worse in Net Profit (-64%; -18% vs. consensus). We have seen a strong improvement in 3Q’22, with sales growing +0.8% (vs. -26% in 1H’22), driven by the recovery in manufacturing levels. Adjusted EBITDA (-21.8% vs. 3Q’21) remains pressured by inflation, although the margin has improved slightly (10.9% in 9M’22 vs. 10.7% in 1H’22). Nothing new in order intake, with a backlog totaling € 2.77 Bn (-3.4% vs. 1H’22).
The results show positive recovery in 3Q’22, especially in revenues. Despite the outperformance over the past month (+13% vs. IBEX), we think the results should be well received.
CAF. BUY.
The company released at yesterday’s closing bell 9M’22 results below expectations in sales (+8% vs. 9M’21; -5% vs. BS(e) and -3% vs. consensus) and EBITDA (-10.3%; -6% vs. BS(e) and -3% vs. consensus), affected by Solaris’ weakness, which continued in 3Q’22. That said, the EBITDA margin was very much in line with expectations (7.2%), which we highlight. Order intake (€>5 Bn) came in higher than expected. The company announced the presentation of its new Strategic Plan for the 1st of December.
We cannot rule out a negative share price reaction if the market only focuses on the EBITDA figure.
ACS. BUY.
At the closing bell the company released slightly better results in Sales (+20.4% vs. 9M’21; +3% vs. BS(e)), very much in line on the EBITDA level and slightly worse in cash generation (€ 288 M of NFD vs. € 234 M BS(e)), where most of the figures were already known after Hochtief released its results. The consolidated EBITDA margin stands at 5.2% (vs. 5.3% BS(e) and vs. 5.7% in 9M’21).
The company has also announced the cancellation of 4.5 million shares of treasury stock (1.6% of capital) as a complement to the scrip dividend (€ 2/sh. against 2021 reserves; 7.6% yield).
We would not expect a significant impact, although it could have a positive slant due to the announcement of the treasury stock cancellation.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Merlin Properties SOCIMI SA is a Spain-based company engaged in the operation of a real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties located in the Iberian Peninsula, primarily in Spain. The Company's activities are divided into the following segments: Office buildings, operating a portfolio of office space; High-street retail, engaged in leasing retail stores; Shopping centers, engaged in managing department stores; Logistics, operating logistics warehouses and distribution centers, and Others. The Company's other activities include property management services rendered to third parties.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.