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IBERIAN DAILY 24 FEBRUARY + 4Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, ENCE.

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 4Q’24 results to be released over the coming days in Spain.

CDU/CSU wins German election
After Thursday’s drops in the US, European stock markets remained cautious on Friday, closing a week marked by the peace talks, with slight drops on most indices, led by the US in view of the disappointing macro releases. In the STOXX 600, most sectors (14/20) posted losses on the week, led by Travel & Leisure and Retail, vs. the better relative performance in Banks and Pharma. On the macro side, in the euro zone there was a mixed reading of the PMIs, with the manufacturing index rising more than expected and the services index falling unexpectedly (due mainly to the poor data in France), although the composite PMI is still at a level consistent with expansion. In Germany, the conservative leader F. Merz (CDU/CSU) won the election for chancellor and will be able to form a government with SPD, avoiding a coalition with multiple parties. In the US, the final U. Michigan consumer confidence for February fell unexpectedly, whereas the services PMI was a disappointment, falling below 50 in February, and the manufacturing index rose slightly, in line with expectations. In US business results, Alliant Energy released disappointing earnings.
What we expect for today
European stock markets would open with gains of +0.5%, celebrating the German elections, but these gains should be reeled in throughout the session, as the result was very much priced in. Currently, S&P futures are up +0.7% (the S&P 500 ended -1.1% lower vs. the European closing bell). Asian markets are falling (China’s CSI 300 -0.4% and Japan’s Nikkei closed).
Today in the euro zone we will learn January’s final inflation and in Germany February’s IFO. In US business results, Domino’s Pizza and Home Depot, among others, will release their earnings.


COMPANY NEWS

ALMIRALL. Better 4Q’24 Results on the operating level but below expectations in Net Profit. Guidance’25 in line. OVERWEIGHT.
4Q’24 Results came in above expectations in EBITDA (€ 50 M vs. € 45 M consensus and € 47 M BS(e)), with a good performance of Ebglyss (sales € 13 M) and Ilumetri (sales +27% vs. +21% BS(e)). However, Net Profit was below expectations (€ 0 M vs. € 8 M consensus) due to a € -10 M impairment in the US (without impact on cash). NFD saw a good performance, falling € -31 M to € 29 M (vs. € 49 M BS(e); 0.2x DFN/EBITDA). The company announced its guidance’25: between +10% and+13% sales growth (vs. +11% consensus) and between € 220/240 M of EBITDA, (mid-point € 230 M; +19% vs. 2024), in line with the consensus (€ 226 M). We do not foresee a relevant impact on the share price after climbing +11% in 2025 (-1% vs. IBEX).

ENCE. Good cycle time for pulp enduring heavy investments. OVERWEIGHT.
We foresee strength in pulp demand, which along with the absence of new relevant capacity incorporations lead us to expect a positive cycle time. Furthermore, the Renewable business offers stability, diversification and potential value enhancement. We expect appealing +2.0%, +10.3% and +15,3% CAGR’24-27e in sales, EBITDA and Net Profit, respectively. The financial position is comfortable, foreseeing a 1.8x-1.9x NFD/EBITDA ratio for 2024-27e. Our valuation stands at € 4.70/sh. (-8% vs. previous T.P., +34% upside), and thus we maintain our OVERWEIGHT recommendation.