EUR 100.00 For Business Accounts Only

IBERIAN DAILY 14 MAY + 1Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, COLONIAL, FERROVIAL, GRIFOLS, LOGISTA, NH HOTELES, SANTANDER, TELEFÓNICA, 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’24 results to be released over the coming days in Spain.

A transition session for stock markets
In a session without macroeconomic references and with the earnings season being the only catalyst, most European indices (with the exception of Spain’s Ibex and Italy’s MIB) ended with moderate drops. In the STOXX 600, Autos and Pharma led gains, whereas Construction and Media saw the worst performance. On the macro side, in the euro zone, the ECB minutes confirmed the possibility of a rate cut in June’s meeting. In the US, the NY Fed survey on 1Y inflation rose to 3.3% after remaining unchanged at 3.0% for 7 consecutive months.
What we expect for today
Stock markets would open flat, with a slightly bullish slant awaiting data on production prices. Currently, S&P futures are down -0.05% (the S&P 500 ended unchanged vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 -0.33%, Japan’s Nikkei +0.28%).
Today in Germany we will learn May’s ZEW index and April’s final inflation, in Spain April’s final inflation, in the UK March’s ILO unemployment rate and in the US April’s production prices and SME confidence. In US business results, Home Depot will release its earnings, among others.

COMPANY NEWS

FERROVIAL. 1Q’24 Results above expectations on the operating level and slightly weaker in cash ex infra. BUY.
1Q’24 Results came in above estimates on the operating level (EBITDA € 254 M vs. € 241 M BS(e) and € 224 M consensus) where Highways (75% T.P.) beat expectations again (EBITDA € 203 M vs. € 191 M BS(e) and € 182 M consensus), fuelled by a positive performance of traffic and toll rates (>+~6% in Managed Lanes vs. 3.4% soft cap). EBITDA margins came in above expectations in Construction (4.6% vs. 3.8% BS(e) and 3.4% consensus). Cash ex-infra fell by € -454 M to € 667 M, below expectations (€ 935 M BS(e)) due to its buyback plan and higher equity contributions in Airports. We expect a positive market reaction following its recent lacklustre performance (+6% in 2024; -4% vs. IBEX).

COLONIAL, BUY
Although slightly below our forecasts due to a scope of consolidation effect, the results are good and show solid operating performance thanks to rent indexation, improved occupancy and rent prices. Rental revenues € 96 M (+6.7% vs. +10.0% BS(e)); EBITDA € 72 M (+10.1% vs. +13.1% BS(e)); recurring EPS € 0.09 M (+24.3%).
Recurring EPS rose +25% to € 0.087 (in line with meeting 2024 guidance of € 0.30-0.31 and € 0.31 BS(e), which the company reiterates).
LTV as of March’24 remained stable vs. Dec’23 at 39.9% (48% in terms of EPRA) but does not include the divestitures announced recently (€~200 M already closed, which if included could bring LTV to 39.1%).
We welcome these results. Looking at how the year has begun, the company is on track to meet its 2024 guidance. In any event, as we have seen in other quarters, the share price will remain highly linked to interest rate expectations, in a company with high leverage.