IBERIAN DAILY 14 APRIL + 1Q'21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACS, BBVA, CAF, CAIXABANK, FERROVIAL, OHL, PROSEGUR.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
Doubts surrounding vaccines weigh on IBEX
It was a session of moderate gains on most European stock markets except the IBEX, which was the only main index not to close in positive numbers after it was learned that US medical agencies temporarily halted vaccinations with Janssen’s vaccine due to 6 cases of blood clots. Thus, within the Euro STOXX Retail and Media were the best relative performers vs. the drops in Household Goods and Banks. On the macro side, in Germany the ZEW index fell unexpectedly (although the subindex Current Conditions indicator improved slightly more than expected). Meanwhile, the Govt. would be finalising a law that, if approved by both Houses, would mean the central Govt. would take control of measures to be taken in case Covid-19 incidence skyrockets, forcing regional and local governments to toughen restrictions. In the US, March’s inflation rose more than expected to 2.6% YoY vs. 2.5% expected (and 1.7% in February), with the core figure at 1.6% vs. the previous 1.3%. On another note, Pfizer would raise the shipment of vaccines by 10% to the US at the end of May unexpectedly. In Japan, February’s machinery orders fell sharply and unexpectedly.
What we expect for today
The main European indices would open with slight gains despite the delay generated by the suspension of J&J’s vaccines. Currently, S&P futures are up +0.06% (the S&P 500 ended up +0.28% vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 16.65). Asian markets are trading with mixed results (China’s CSI 300 +0.45% and Japan’s Nikkei -0.35%).
Today in the euro zone we will learn February’s industrial output, in Spain March’s core inflation and in the US the Beige Book. In US business results, JP Morgan, Goldman Sachs and Wells Fargo, among others, will release their earnings. In debt auctions: Germany (€ 1.5 Bn in 1.25% bonds due 2048).
COMPANY NEWS
CAIXABANK (we incorporate Bankia). Trading at a standalone RoNAV! We reiterate BUY.
The new CABK is here with improved figures: 8.6% RoNAV’22 BS(e) vs. 7.4% standalone, trading at 0.7x P/RoNAV and with higher yield (>6% vs. 5% standalone). The positive aspects of the merger are not being priced in: (i) 20% increase to EPS’22 BS(e) in “a floor scenario” (i.e. assuming only achieved cost synergies’22) and (ii) near normalisation of CoR in 2021 (45bps vs. 75bps in 2020). All this is consistent with ~12% CET (at the high end of the comfort range). We raise our T.P. to € 3.50/sh. (around +40% upside), reiterating our BUY recommendation.
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.
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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