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IBERIAN DAILY 27 FEBRUARY + 4Q’22 RESULTS. HIGHLIGHTS AND PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, CAF, ECOENER, METROVACESA.

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’22 results to be released over the coming days in Spain.

Indices are far from resistance levels
After the weekly drops in stock markets, indices are far from their resistance levels also following consumption and inflation data that increase fears about inflation and further tightening in the monetary policy by the Fed/BCE. Thus, the Euro STOXX ended last week with drops of around -2%, whereas corrections did not reach -1.5% in the DAX, as well as in the Ibex that ended below 9.300 points. In the Euro XTOXX Media and Food were the best performers (ending in positive territory), whereas Real Estate and Consumer Goods were the worst performers, falling >-3%. On the macro side, in the US, new home sales, personal outlays and the core deflator of personal consumption rose more than expected in January, as well as the Consumer Confidence of the University of Michigan (67.0 vs. 664 expected). From the Fed, Collins and Bullard showed in favour of further rate rises up to sufficiently restrictive levels. In Mexico, the 4Q’22 GDP grew more than expected.
What we expect for today
European stock markets would open with slight gains, with cyclicals slightly more hit. Currently, S&P futures are up +0.05% (the S&P 500 ended +0.14% higher vs. the European closing bell). Volatility in the US increased (VIX 21.67). Asian markets are falling (China’s CSI 300 -0.4% and Japan’s Nikkei -0.1%).
Today in the euro zone we will learn January’s M3 and February’s economic climate indicator, and in the US January’s durable goods orders and January’s pending home sales. In US Results, Pinnacle, Viatris and Occidental Petroleum, among others, will release their earnings. As for auctions, Germany will issue € 6 Bn in 6 & 12M T-bills.


COMPANY NEWS

CAF. Slightly better FY2022 Results. No surprises in Guidance’23. BUY.
The company released at Friday’s session better FY2022 Results in EBITDA (+1.5% vs. BS(e) and +2.2% vs. consensus), with the EBITDA margin slightly beating expectations at 7.3% (7.1% BS(e) and 7.2% consensus) thanks to the railway division, as Solaris saw an EBITDA margin of only 2.9% (vs. 4.3% BS(e) and 4.4% consensus). NFD came in better than expected (€ 278 M vs. € 288 M BS(e) and € 335 M consensus) although factoring rose. With the absence of surprises in its guidance’23, the worse performance of Solaris could weigh on the market reaction. The share price slid -0.5% last Friday (-0.3% IBEX), underperforming the IBEX by -2% YtD. We revise our estimates, with a +12% CAGR’22-26e in EBITDA (vs. +8% previously) although the increase in CAPEX leads us to cut our T.P. to € 43.00/sh. (+46% upside). We reiterate our BUY recommendation.

ECOENER, BUY
At Friday’s closing bell the company announced it had signed two PPAs with the state-owned group EDEESTE for the photovoltaic renewable projects Cumayasa I and II (Dominican Republic) at a price of US$ 88.00/MWh. The sale of energy will start on 31/12/23 and will have a 15-year duration. Note that these two farms account for 27% of the operating assets target’22. Positive news not only thanks to the signing of the PPAs but also to the fact that the price is +25% higher than we expected, which would add additional +3.5% to the T.P. What is not clear in the news is whether the farms mentioned will not start operating until December’23 or whether they are already operating even without the PPAs (merchant), as the expected starting operation date of these two projects was at the end of 2022.

METROVACESA. FY2022 results in line with the guidance, although slightly below BS(e)
On the year the company delivered 1,699 units (guidance of 1,600-2,000; our estimate was 1,800). Sales: € 519 M (+1.7% vs. +2.8% BS(e)); EBITDA: € 46 M (-9.8% vs. +4.7% BS(e)); Net Profit: € -23 M. The losses are due to the lower appraisal of the land portfolio. Presales performance was satisfactory: 496 units in 4Q’22 standalone (vs. 361 in 3Q’22 and 412 in 2Q’22), consistent with a run-rate of ~2,000 units sold per year. Presales coverage is >80% for 2023 and >60% for 2024. The results are in line in revenues and slightly below forecasts in EBITDA. In any event, the company has met its deliveries and operating cash flow targets. Looking ahead to the coming years, MVC has reiterated its target of ~2,000 units delivered. The company estimates that operating cashflow in 2023 (the base for the dividend payment) will be lower than that of 2022 due to the bigger effort in development and land purchases. In 2022 MVC paid a dividend of € 1.65/sh., equivalent to 26% of market cap as of Dec’22.