EUR 100.00 For Business Accounts Only

IBERIAN DAILY 17 JANUARY + 4Q’23 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, FERROVIAL, IAG, IBERDROLA, NEINOR HOMES, OHLA.

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

Selling continues
European stock markets again fell after the latest comments by Central Bank heads, although expectations of interest rate cuts in 1H’24 have only fallen slightly. In the STOXX 600, most sectors ended in the red (17 of 20), with Media and Food of the few recording gains, whereas Real Estate and Utilities suffered the biggest losses. On the macro side, in Germany January’s ZEW index improved unexpectedly, although the current conditions component remains in negative numbers, while December’s final inflation confirmed the preliminary 3.7% (in line with expectations). In the US, January’s Empire manufacturing index fell unexpectedly to a low since the pandemic. From the Fed, C. Waller admitted that the markets should be more cautious with expected rate cuts. In China, the 4Q’23 GDP grew slightly less than expected, dragged down by residential investment (which in December fell more than expected to -9.6% YoY), whereas industrial output rose more than expected and retail sales slowed more than expected in December. In US business results, Goldman Sachs beat expectations and Morgan Stanley released disappointing earnings.
What we expect for today
European stock markets would open with drops of up to -1.0%, hit by the data out of China and a less favourable outlook for rate cuts in 1H’24. Currently, S&P futures are down -0.35% (the S&P 500 ended -0.07% lower vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -1.18%, Japan’s Nikkei -0.40%).
Today in the UK we will learn December’s inflation, in the euro zone December’s final inflation, in Brazil November’s retail sales and in the US December’s retail sales and industrial output, as well as January’s NAHB real estate confidence index. In US business results, Prologis, Charles Schwab, Alcoa and American Bank, among others, will release their earnings.


COMPANY NEWS

NEINOR HOMES, BUY
At yesterday’s closing bell the company announced a trading update with provisional financial information (unaudited) for 2023. HOME delivered ~2,500 homes in 2023 (around -9% vs. 2022) to reach EBITDA and Net Profit (adjusted for one-off costs) of € 140 M and € 90 M, respectively (this is basically in line with the consensus compiled by the company, € 138 M and € 91 M, as well as with our estimates). The company will release its full results on 21 February.
Separately, in line with meeting its operating and financial targets, HOME has decided to pay out the second tranche of the shareholder distribution approved in the last EGM for €~40 M (€ 0.53/sh.), meaning a 5.1% yield.
Positive news, although of little impact. Deliveries in 2023 were biased towards the second half of the year, as in 1H’23 only 637 units were delivered (~2,500 the entire year), meaning EBITDA was only € 22 M (vs. € 140 M for the full year). As for the shareholder remuneration (a capital reduction with a refund of contributions), it had already been approved by the Board and thus is no surprise.