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IBERIAN DAILY 25 APRIL + 1Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, AEDAS HOMES, CELLNEX, EBRO FOODS, IBERDROLA.

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.

Stock markets deflate
European stock markets started the session off well but began to deflate, eventually closing with losses after US stock markets opened in the red and following a new rise in sovereign debt yields (mainly peripheral debt). In the STOXX 600, almost all the sectors ended with losses, led by Real Estate and Insurance, with Technology and Basic Resources being the best performers. On the macro side, in Germany April’s IFO rose more than expected, the third straight increase and reaching its highest level since May’23. In Spain, the Spanish PM, P. Sánchez, will announce whether he resigns on the 29th of April. In the US, March’s durable goods orders rose more than expected. In US business results, Boeing, AT&T and Hasbro beat expectations, as well as Meta (although with disappointing guidance and capex), IBM and Ford came in slightly below expectations. On another note, the mining group BHP submitted a bid to acquire its peer Anglo-American.
What we expect for today
Stock markets would open with slight drops, with the tech sector hit by the results released in the US and the rises from the past few days. Currently, S&P futures are down -0.68% (the S&P 500 ended up +0.34% vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 +0.12%, Japan’s Nikkei -2.17%).
Today in the US we will learn pending home sales and weekly jobless claims. In US business results, Microsoft, Alphabet, Intel, Merck, Caterpillar, Comcast, T-Mobile and Gilead, among others, will release their earnings.


COMPANY NEWS

AEDAS HOMES, BUY
Yesterday the company made public the main magnitudes for 2023-204 fiscal year, which are in line with our expectations and those of the consensus: annual revenues > € 1.1 Bn, with around € 950 M corresponding to delivery of BtS and BtR units and the remaining > € 150 M to the Real Estate Services division and land sales. The target was around € 1 Bn although the company had not specified whether this included land sales (our revenue estimate was € 980 M, in line with the consensus). EBITDA would total € 170-180 M (vs. € 168 M BS(e)), with a development margin of 24.0%/24.5% (vs. 25% BS(e)). As for presales, the company has ended the year with a portfolio of more than € 960 M after selling 2,503 units (BtS and BtR). The coverage ratios for 2024-25 and 2025-26 were 67% and 37% as of March’24, which lends solid visibility for the next two years. The numbers meet consensus expectations, although the truth is that EBITDA is slightly below the company’s own guidance from three years ago (in June’21 the target set was €~1 Bn of sales and € 190-200 M of EBITDA). In this regard, we think the guidance was outdated, and thus we downplay its importance.

EBRO FOODS, BUY
1Q’24 Results came in above expectations in EBITDA thanks to the pasta division (+68.6% reported vs. +19.9% expected) where the margin rises by +650bps vs. 1Q’23 (+490bps vs. expectations). This performance would be explained by a significant increase in volumes (after the inflationary cycle from the last few years and its greater price elasticity) and by lower costs. With the rainfall seen in Spain the draught risks are alleviated, which should benefit the business. Debt was cut by around € -64 M to € 507 M (1.27x NFD/EBITDA LTM). In general, good results, although explained by external factors but also by the price management, cost mix, etc. For the time being, we maintain our estimates unchanged although we believe that these results should underpin the share price following its YtD underperformance (-6.6% vs. Ibex).