IBERIAN DAILY 29 MAY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AEDAS HOMES, NATURGY, REPSOL.Market consolidation
European stock markets saw slight drops following the gains from the last few days, with the Ibex remaining above 14,100 points despite leading corrections. Thus, in the STOXX 600 Real Estate, Autos and Energy were the only sectors ending in positive territory vs. the bigger losses of Retail and Basic Resources. On the macro side, in Germany the number of unemployed rose significantly in April although the unemployment rate remained stable at 6.3%. in the US, the Richmond Fed manufacturing index recovered in line with expectations. The Fed meeting minutes showed caution towards new rate cuts, which could be pushed back even more than what the market is pricing in if inflation remains persistent. As for trade matters, an International Trade Court has annulled the reciprocal tariffs (including those on China, Mexico and Canada) due to an emergency law being invoked erroneously, while those on vehicles, steel and aluminium imposed under Section 232 and 301 are maintained. In US Results, NVIDIA slightly beat expectations, Salesforce was in line and HP released disappointing earnings.
What we expect for today
European stock markets would open with gains of more than +1.0% following Trump’s speech, which was positive towards negotiations with China. Currently, S&P futures are up +1.66% (the S&P 500 ended -0.22% lower vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.70% and Japan’s Nikkei +1.70%).
Today in Spain we will learn April’s retail sales, in the US the 1Q’25 GDP (2nd estimate), weekly jobless claims and April’s pending home sales and in Brazil April’s unemployment rate. In US business results, BestBuy, Costco and Dell, among others, will release their earnings.
COMPANY NEWS
AEDAS HOMES, UNDERWEIGHT
The company had already pre-released the main KPIs of the 2024/25 period, and thus there are no surprises in its P&L statement: Sales € 1.16 Bn (+1%); EBITDA € 164 M (-5%); Net Profit: € 150 M (+38%). Total revenues rose although with lower land sales (-38%). The gross margin fell -70bps due to a mix effect, explained by the higher weight of BtR projects. EPS rose +38% thanks to capital gains generated in the acquisition of Priesa (€ +50 M). The company announced a € 3.15/sh. DPS proposal (-30% including 2023 extra dividend vs. 2.20 BS(e), 12.0% yield).
Despite these good results (in line with expectations), we reiterate our UNDERWEIGHT recommendation.
Aedas Homes is engaged in the housing development business in Spain. The company has a portfolio of approximately 1.5 million square meters of land that it develops for residential purpose. Co. develops multifamily homes for the housing market in Madrid, Catalonia, Levante and Majorca, Costa del Sol and Seville.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
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