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IBERIAN DAILY 30 NOVEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AEDAS HOMES, COLONIAL, FCC.

Inflation takes a breather
It was a transitional session for the European stock markets, which saw a mixed performance despite rumours from China and the positive inflation data. Thus, within the Euro STOXX, Basic Resources and Energy led gains vs. the drops in Chemicals and Technology. On the macro side, in the Euro zone, November’s economic climate improved more than expected, this being the first increase since February, although industrial confidence fell unexpectedly. In Spain and Germany, inflation slowed more than expected in November to 6.6% and 10.0% YoY, respectively. In the US, November’s consumer confidence fell less than expected but still stands at relatively low levels. Separately, September’s CaseShiller home prices fell somewhat more than expected MoM. In China, November’s manufacturing and services PMIs fell more than expected in November to 48 and 46.7, respectively. Separately, the Govt. commissioned a consortium formed by Alibaba and Tencent, among other companies, the manufacturing of microchips to reduce dependence on external companies (ARM, etc.). In Japan, October’s industrial output contracted more than expected.
What we expect for today
European stock markets would open with gains of up to +0.5%. Currently, S&P futures are flat (the S&P 500 ended unchanged vs. the European closing bell). Volatility in the US fell (VIX 21.89). Asian markets are falling (China’s CSI 300 -0.2% and Japan’s Nikkei -0.25%).
Today we will learn in the Euro zone November’s inflation, in Spain October’s retail sales, in Germany November’s unemployment data, and in the US Powell will give a speech, we will learn the Fed’s Beige Book, the second reading of the US GDP, Chicago PMI and and November’s ADP employment survey. In debt auctions: Germany (€ 3 Bn in bonds due 2032).


COMPANY NEWS

INMOBILIARIA COLONIAL. Revision of the portfolio value after rate hikes and lack of visibility. BUY.
We lower our T.P. by -27% to € 7.33/sh. (+23% upside) after cutting our estimated value of the portfolio by -16% through 2024 due to worse yield prospects linked to rate hikes (now +107bps in 2022-24 vs. +33bps previously), partially offset by the performance of rents (+6%) and other minor adjustments. We maintain our BUY recommendation because we believe that the market’s stance towards the stock is overly pessimistic (it is pricing in a -51% discount) and following its poor performance this year (-25% in absolute terms, +10% vs. sector and -42% vs. Merlin).

AEDAS HOMES. 1H’22 Results in line with expectations in revenues, and below in EBITDA BUY.
The results are poor due to the low number of deliveries over the period: 524 units in 1H’22 vs. 712 units in 1H’21, although this is due to a calendar effect as a result of when the deliveries are made this year vs. last year. The company had already released a trading update with presale and delivery figures as of Sep’22, and thus the most interesting data from these results was already known.
From the P&L statement of the period, we highlight the fact that EBITDA came in below expectations (-53% vs. -36% BS(e) and consensus), although as a result of the low number of deliveries, it is difficult to estimate EBITDA (the company did not provide the 1Q’22 EBITDA figure), which is negatively affected by the non dilution of fixed costs, and we would not draw too many conclusions from this deviation. In fact, the company reiterates its guidance for the full year, which means generating € 144 M of EBITDA in the second half of the year (vs. € 21 M in 1H’22).