IBERIAN DAILY 17 NOVEMBER + 3Q’22 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AENA, COLONIAL, ELECTRICITY SECTOR, REPSOL.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 3Q’22 results to be released over the coming days in Spain.
Geopolitics and macro situation lead to market doubts
Geopolitical tensions following the missile strike (apparently launched by Ukraine) on the Polish border (NATO member) and stronger October retail sales than expected in the US, which could continue to spur the Fed to raise rates, dragged stock markets down. Thus, in the Euro STOXX, most sectors closed in the red, with Energy and Insurance the best performers, while Autos and Retail posted the biggest drops. On the macro side, in the UK October’s inflation rose more than expected to 11.1% YoY, affected mainly by energy prices. In the US, industrial output contracted unexpectedly in October. residential construction sector confidence (NAHB) for November fell for the eleventh straight time, now close to pandemic levels. Esther George of the Kansas Fed (no vote) fears the labour market will not deteriorate enough if the economy does not go into recession, whereas Daly is in favour of ending up in the range of 4.75%-5.0%. The Republicans have confirmed the majority in the House of Representatives. In US business results, Lowe’s beat expectations and Target released disappointing earnings, with NVIDIA and Cisco in line.
What we expect for today
European stock markets would open with slight gains, where the technology sector related to chips would be dragged down by Micron Technology’s warnings about excessive inventories and weak demand. Currently, S&P futures are up +0.33% (the S&P 500 ended -0.67% lower vs. the European closing bell). Volatility in the US rose (VIX 24.11). Asian markets are falling (China’s CSI 300 -1% and Japan’s Nikkei -0.35%).
Today in the euro zone we will learn October’s final inflation, in the US October’s building permits and housing starts, November’s Philadelphia Fed and weekly jobless claims. In debt auctions: France (€ 9.5 Bn in bonds due 2028, 2029 and I/L due 2031, 2032 and 2047).
COMPANY NEWS
COLONIAL. Good 3Q’22 Results, better in rents and in line in recurring EPS. BUY.
Good 3Q’22 Results, showing strong growth in rents and recurring EPS. Gross rents grew +12% (+10% BS(e)) thanks to indexation, better occupancy (+244bps vs. Sept’21) and delivery of projects. LfL rents grew +7% (+5% adjusted for LfL of renewals), whereas the recurring EPS grew +23% (in line BS(e)) due to lower financial results. This quarter there was no asset appraisal. After these results, the company now expects to beat the top end of the recurring EPS guidance’22 of € 0.28/0.29/sh. (in line BS(e)), which seemed conservative. Good results, in our view, which should see a good market reaction even though market’s fears about recession and interest rates do not vanish after these results.
Aena SME SA, formerly Aena SA, is a Spain-based company primarily engaged in the airports operation. Its activities are divided into four segments: Airports, which comprises Aeronautical subdivision, responsible for the management of airports, jetways, security, handling, cargo and fuel services, among others, as well as Commercial subdivision, including duty-free and specialty stores, restaurant services, car rental, as well as banking services and advertising; Services outside the terminal, which manages real estate assets, such as parking lots, warehouses and lands; International, which comprises operations of Company's subsidiary, Aena Desarrollo Internacional SA, that invests in other airport owners principally in Mexico, Colombia and the United Kingdom; and Others, encompassing corporate activities. It manages tourism, hub and regional airports, as well as heliports and general aviation areas. Furthermore, its destination range comprises Europe, the Americas, Asia and Africa.
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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