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IBERIAN DAILY 07 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, FCC, FERROVIAL, MEDIASET ESPAÑA, METROVACESA.

The positive start to the week comes to a halt today
European stock markets began the week with gains underpinned by the return to normal in Shanghai and Beijing, and although the rise in US sovereign debt yields caused the rally to lose momentum towards the end of the day. With all the sectors of the Euro STOXX in positive numbers, the best performers were Banks and Technology, while Construction and Food were the worst relative performers. On the macro side, the ECB would be considering the possibility of creating a new purchase programme if need be in order to bolster debt markets. In the United Kingdom, Boris Johnson won the vote of no confidence, but the result leaves him in a position of political weakness. In Japan, household spending contracted more than expected in April, whereas real wages fell by -1.2% for the first time in three months.
What we expect for today
European stock markets would open with losses of around -0.5% in view of rising yields and the spectre of a recession. Currently, S&P futures are down -0.6% (the S&P 500 ended down -0.48% vs. the European closing bell). Volatility in the US rose (VIX 25.07). Asian markets are climbing (China’s CSI 300 +0.5% and Japan’s Nikkei +0.4%).
Today in Spain we will learn April’s industrial output, in the euro zone June’s SENTIX investor confidence index and in the US April’s trade balance. In debt auctions: Spain (€ 5.5 Bn in 6M and 12M t-bills).


COMPANY NEWS

ALMIRALL. Positive 52-week results in Lebrikizumab. BUY.
ALM has just announced that 80% of patients who responded to Lebrikizumab (its Phase III monoclonal antibody for atopic dermatitis) maintained improvement in skin clearing and disease severity (including itch relief) at week 52 in the two maintenance dosing (once every two weeks and once every four weeks). The safety profile has been consistent with previous studies already conducted on Lebrikizumab. The full study data will be published at a congress (to be specified) in 2022 and ALM will submit the Marketing Authorisation Application (MAA) to the European Medicines Agency (EMA) in the second half of 2022, as expected. Thus, the data released are positive and confirm the favourable results obtained with this treatment in monotherapy at 16 weeks. Our valuation already prices in Lebrikizumab (19% of our T.P., 75% probability of success; peak sales of € 450, 52% of sales in 2022 vs. roll-out in 2023 BS(e)). We expect a positive share price reaction, especially after the stock has fallen by -14% from this year’s highs (it is down -5%).

MEDIASET ESPAÑA. MFE raises its bid +6%. BUY.
At yesterday’s closing bell MFE (56% TL5) announced it has improved its offer by increasing the part in cash from € 1.89 to € 2.16/sh. (+14%). The part in shares remains unchanged (9 shares in MFE for every 2 in TL5). Thus, at yesterday’s closing price, the part in cash now represents 48% of the total (vs. previous 44%), and the total improvement is +6% to € 4.55/sh. (TL5 is trading at a -10% discount to the value of the new bid). Although the improvement is welcome, we still believe the bid is too low, as the price offered is -31% below the “right of separation” in cash that MFE offered in 2019 (TL5 has not paid out dividends since then). Additionally, the price is -35% below our T.P.