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IBERIAN DAILY 02 MAY + 1Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AENA, ARCELORMITTAL, METROVACESA, REDEIA.


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.

Ibex falls back below 11,000 points
European stock markets posted losses ahead of the Fed meeting, where the IBEX was once again the worst performer. Within the STOXX 600 sectors, the biggest gains came in Real Estate and Household Goods, whereas Autos and Basic Materials ended with the biggest drops. On the macro side, in the euro zone April’s inflation remained at 2.4% YoY as expected, with the core figure falling less than expected to 2.7%, whereas the 1Q’24 GDP grew more than expected to 0.4% YoY. In Spain, the 1Q’24 GDP unexpectedly sped up its growth. In the US, the Fed made no changes to its monetary policy, maintaining the idea of cutting rates, although J. Powell left the door open to when the cycle will begin. In June the Fed will begin to slow the pace of shrinking its balance sheet. Meanwhile, ADP private employment rose more than expected, the manufacturing ISM, Conference Board consumer confidence and April’s Chicago PMI fell unexpectedly, while February’s housing prices rose more than expected. In Mexico, the 1Q’24 GDP slowed unexpectedly. In US business results, Amazon, Coca Cola, Eli Lilly, 3M, Estee Lauder, Qualcomm, Ebay and Pfizer beat expectations, McDonald’s was in line and PayPal, Starbucks and Marriott released disappointing earnings.
What we expect for today
Stock markets would open with slight drops that could widen throughout the session, but with growth performing better in view of the falling sovereign debt yields. Currently, S&P futures are up +0.5% (the S&P 500 ended down -1%vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 closed, but the Hang Seng +2.4%, Japan’s Nikkei -0.1%).
Today in the US we will learn the trade balance and March’s factory orders and in the euro zone the final manufacturing PMI. In US business results, Baxter, Moderna, Apple, Expedia and Pioneer, among others, will release their earnings.


COMPANY NEWS

AENA. 1Q’24 results far above expectations in EBITDA thanks to one-offs in costs. BUY
EBITDA came in much better than expected (+57.7% vs. +34.5% consensus), underpinned by the improved revenues vs. expectations (+20.1% vs. +16.8% consensus) and the reduced energy cost (-25% vs. 1Q’23) and the decrease in construction services in the Brazilian concessions (€ -29 M), with a 47.1% EBITDA margin (vs. 35.9% in 1Q’23 and 41.4% expected). Positive results, but supported by cost one-offs, and thus we cannot rule out the possibility of some volatility in their reception. In any event, we see room to improve our estimates and T.P. to above € 190/sh., and thus we maintain our BUY recommendation.

METROVACESA. Solid presales data, with strong housing demand. BUY
The company’s trading statement shows housing sales at a higher price than we expected. In any event, MVC reiterates its guidance for 2024 and we will not change our numbers either, given that in 1Q’24 there is a mix effect that should be cancelled out in the coming quarters. Sales reached € 140 M (+76% vs. +59% BS(e)) and EBITDA € 18 M (+307% vs. +227% BS(e)). The strong growth is due to a comparison effect (in 1Q’23 hardly any homes were delivered). We highlight the presales figure. In 1Q’24 509 units were presold (vs. 415 units BS(e)) in a strong residential market. The presales coverage ratio is 90% for 2024, 64% for 2025 and 42% for 2026.

REDEIA, SELL
The 1Q’24 results were in line with consensus and our expectations. 1Q’24 EBITDA came in at € 340 M (-15.5% vs. 1Q’23 and BS(e) and consensus) and Net Profit at € 132.3 M (-26.5% vs. 1Q’23, in line with BS(e) and the consensus) due mainly to the impact from the expiration of the regulatory useful life of the pre-1998 assets. RED reiterates the annual guidance for 2024: EBITDA above € 1.3 Bn (in line with BS(e) and the consensus) and Net Profit above € 500 M (in line with BS(e) and the consensus).
We do not expect an impact from these results, and no conference call was held. Although RED’s share price has risen around +5% in 2024 vs. +6.6% IBEX, we do not expect the new methodology for calculating network remuneration from the 2026-31 regulatory framework to be divulged until the end of the year (this is a significant driver for RED). For the time being we maintain our SELL recommendation in view of the low upside and the lack of visibility on revenue generation in the short term.

ARCELORMITTAL, BUY
The 1Q’24 results beat expectations in EBITDA (US$ 1.96 Bn vs. US$ 1.79 Bn BS(e) and US$ 1.81 Bn consensus) against a backdrop of better prices (and spreads). Compared to 4Q’23, the general dynamic is positive on the price side, although deliveries were slightly lower than expected in Brazil, and costs burdened recovery in Europe. In line with expectations, NFD grew seasonally to US$ 4.78 Bn (vs. US$ 2.9 Bn at the end of 2023), meaning 0.7x NFD/EBITDA’24e. On the guidance level, the company maintained aggregate apparent consumption (ex-China) with +3%/+4% growth, although it suggests that restocking would not yet have begun.
Positive results, although against a backdrop lacking clear signs of recovery, they drag down the stock’s momentum (-17.6% vs. IBEX YtD).