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IBERIAN DAILY 14 NOVEMBER + 3Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, NEINOR HOMES.

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’23 results to be released over the coming days in Spain.

All eyes on US inflation data
A week loaded with macro data releases started off with gains in European equity markets, with all eyes on the inflation data to be released today in the US. In the STOXX 600 only Media, Real Estate and Consumer Goods ended with losses, compared to gains of more than +1.0% for Travel & Leisure, Banks and Energy. In Spain, the debate for Pedro Sanchez’s investiture as PM will be held on 15 and 16 November. In China, October’s total financing fell in line with expectations, while new loans fell less than expected. In the US, Republican Speaker of the House, Mike Johnson, will submit to vote today a new financing draft bill that would avoid a shutdown until the end of Jan’24. In 3Q’23 US business results, Tyson Foods beat expectations and Henry Schein was in line.
What we expect for today
European stock markets would open with some bearish slant, awaiting the US inflation data. Currently, S&P futures are flat (the S&P 500 ended -0.17% lower vs. the European closing bell). Volatility in the US rose (VIX 14.76). Asian stock markets are mixed (China’s CSI 300 -0.15%, Japan’s Nikkei +0.34%).
Today in the euro zone we will learn the second reading of the GDP and 3Q’23 unemployment, in Spain and the US October’s inflation and in Germany November’s ZEW index. In US business results, Home Depot, among others, will release its earnings.


COMPANY NEWS

ACS. Slightly better 9M’23 Results in EBITDA and operating cash. BUY
At yesterday’s closing bell the company released 9M’23 Results very much in line with expectations in sales and slightly better in EBITDA (+3% vs. BS(e) and +1% vs. consensus), with net debt in line (€ 590 M vs. € ~600 BS(e), already with the cash from SH-288), and with better-than-expected operating cash flow. This is partially explained by the better performance of working capital (although it deteriorated slightly vs. 1H’23 and vs. 9M’22, as seen in 1H’23). The backlog rose by +9% vs. YE’22 (adjusted for FX). Much of these results was already known following the release of Hochtief’s (73% ACS; 65% EBITDA’23e) and Abertis’s results (44% ACS; 11% EBITDA’23e), and although EBITDA in the rest of the divisions was slightly above expectations, and the operating FCF was slightly better, we do not expect a relevant impact on the share price after the +10% outperformance vs. the IBEX YtD. If we assume the selling price of the SH-288 (which was +35% above the acquisition price) in our valuation, the T.P. would rise +6% to € 37.20/sh., which would yield +10% upside, and thus we maintain our BUY recommendation awaiting the CMD announced for 1Q’24.