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IBERIAN DAILY 21 FEBRUARY + 4Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, ALMIRALL, FERROVIAL, REPSOL, TELEFÓNICA, VISCOFAN.

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

Focus still on the situation in Ukraine
European stock markets ended the week with losses of around -2% due to the uncertainty surrounding a possible Russian invasion of Ukraine. Despite the meeting scheduled between the Russian Foreign Minister (Lavrov) and the US Secretary of State (Blinken) this week in Europe, the clashes and evacuation in eastern Ukraine did not help the current climate. Today Putin and Biden might meet in the summit organised by Macron. In the Euro STOXX, among the few sectors in positive territory over the week we highlight Household Goods and Real Estate, whereas Travel & Leisure and Banks headed up the losses. On the macro side, in the euro zone February’s consumer confidence worsened unexpectedly. In the US, January’s second-hand home sales rose more than expected. From the Fed, Williams backs the rate hike in March and believes the reduction to the balance sheet should come at the end of this year, whereas Evans believes monetary policy should be less restrictive than during other situations. In Japan, the Services PMI once again fell to 42.7, whereas the Services PMI contracted to 52.9. In China, the PBoC kept reference interest rates unchanged (1Y and 5Y loans) at 3.7% and 4.6%, whereas home prices continued to slow in January. In US business results, Deere&Co. beat expectations, while PPL and Alliant Energy released disappointing earnings.
What we expect for today
The European stock markets would recover, with gains of between +0.5% and +1.0%, awaiting the outcome of the US-Russia summit. Currently, S&P futures are up + 0.6% (the S&P 500 was +0.19% higher vs. the European closing bell). Volatility in the US dropped (VIX 27.75). Asian markets are sliding (China’s CSI 300 closed, and Japan’s Nikkei -0.8%).
Today in the euro zone and the UK we will learn February’s preliminary manufacturing and services PMIs. In US business results, Williams Cos, Home Depot, Mosaic and Verisk Analytics, among others, will release their earnings. Debt auctions: Netherlands (€ 2 Bn in 3M and 6M t-bills), Germany (12M t-bills) and France (3M, 6M and 12M t-bills)

COMPANY NEWS

VISCOFAN. Awaiting the Strategic plan. We raise our T.P. to € 61.76/sh. (+12% upside). BUY.
The good operating performance as of 9M’21, with +9.3% and +17% organic growth in sales and EBITDA, respectively (2x VIS’ 2021 guidance) do not offset the poor share price performance seen over the last 6 months (-8% and -4% vs. Ibex and -6% sector), hit by inflation and swine fever outbreaks in Europe (irrelevant for the time being). We believe that the renewed market volatility renders VIS an interesting defensive option, as we see low downward risk for a stock that is trading at appealing ratios after having significantly underperformed its peer Devro in 2021 (-44%). We upgrade our recommendation to BUY (from SELL).

ALMIRALL. Better 4Q’21 results than expected on the operating and cash level. Guidance’22 in line with expectations. BUY.
The 4Q’21 results came in above expectations in EBITDA (€ 54 M vs. € 45 M BS(e) and consensus), with a good performance in NFD (-17% to € 243 M vs. € 264 M BS(e); ~1x NFD/EBITDA). The company announces a DPS’21 of € 0.19/sh., 1.8% yield (+0% vs. 2020, in line with the consensus) and a guidance’22 of medium single-digit growth in sales and between € 190 M and € 210 M of EBITDA, in line with the consensus (€ 205 M). It announces the appointment of a new Chairman from the founding family (Carlos Gallardo). We expect a neutral/positive share price reaction following the stock’s recent performance (-4% in 2022; -3% vs. IBEX). We cut our estimates by -21% in EBITDA’22-24, lowering our T.P. to € 13.50/sh. (-13% vs. previously), which still yields significant upside (+24%). BUY.