EUR 100.00 For Business Accounts Only

IBERIAN DAILY 25 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AMADEUS, ENDESA, GRIFOLS, METROVACESA, PUIG BRANDS.

Huge uncertainty in Middle East
It was a highly volatile session on stock markets in view of the discrepancies between the statements made by US and Iranian sources, but in any event the Strait of Hormuz remains blocked. In the STOXX 600, the gains were led by Energy (with oil rallying +4.0%) and Telecoms, while Banks and Industrials ended with the biggest drops. On the macro side, in the euro zone March’s preliminary manufacturing PMI rose more than expected, although new orders contracted for the first time in eight months, whereas the services PMI fell more than expected. On the whole, the composite PMI is close to falling below 50 (low since May’25). In the US, unit labour costs (final) for 4Q’25 grew more than expected as a result of the cut to non-farm productivity. Meanwhile, March’s manufacturing PMI rose unexpectedly, with the services PMI falling more than expected. In Mexico, January’s IGAE activity index contracted unexpectedly vs. the previous month. On the geopolitical side, while the US is sending 3,000 soldiers to the Middle East, according to US press, a 15-point plan would have been delivered to Iran (similar to the agreement Obama brokered in the past), which would include raising the sanctions on Iran in exchange for the country ending its nuclear defence ambitions and a 30-day ceasefire (according to Israeli press).
What we expect for today
European stock markets would open with gains of more than +0.5%. Currently, S&P futures are up +0.7% (the S&P 500 ended -0.3% lower vs. the European closing bell). Asian markets are rising (China’s CSI 300 +1.2%, Japan’s Nikkei +2.8% and South Korea’s Kospi +1.7%).
Today in the UK we will learn February’s inflation, in Germany March’s IFO and in the US February’s import prices.


COMPANY NEWS

AMADEUS. AI: threat or opportunity? We lower our T.P. -12% to € 73.30/sh. (+47.5% upside) but reiterate our OVERWEIGHT recommendation.
We believe the recent drop in AMS’s share price is excessive, especially compared to the market (-54% vs. IBEX and -27% vs. STOXX 600 Tech) due to the doubts surrounding AI on its business. We think the company has a strong competitive position, underpinned by its critical infrastructure, its role as reference system and its global scaling. Thus, we believe that if AI has an impact, it will centre on the Hospitality business, which is a small proportion of the overall business (11% MC). Assuming a more conservative approach in air traffic performance, we lower our estimates -6% to a CAGR’26-28e of around +6% in revenues and EBITDA. The company’s solid financial position will lead to a CAGR’26-28e of +5.5% in FCF, allowing for an ordinary dividend (~4% yield) and additional buybacks of up to € 2 Bn/year (~10% yield).

GRIFOLS, OVERWEIGHT
Yesterday the company announced it has decided to initiate a process to assess a potential IPO of a minority stake in its Biopharma business in the US. Regardless of the materialization of the IPO (that is not guaranteed), GRF will remain listed in Spain on the continuous market. On another note, the press speculates that the possible deal could value this business at around US$ 20 Bn (e 17.3 Bn vs. GRF’s € ~5.44 Bn market cap.
Awaiting further details, the deal would allow GRF to enhance the value of its main business (Biopharma accounts for 86% of sales and reported +8.4% LfL growth in 2025) and in its most relevant market (we assume the US represents ~55% of GRF’s total sales BS(e)). On another note, the funds raised should speed up debt reduction (€ 7.76 Bn; 4.2x NFD/Ad. EBITDA) and eventually bolster growth investments in strategic markets. On the negative side, the deal is proposed at a time when the company has not yet recovered the market confidence (after sliding -17% in 2026 the share price is trading around -40% below levels prior to Gotham report) whereas the geopolitical environment and the high existing volatility stemming from the war in Iran could represent a hurdle for the deal.

PUIG BRANDS. Confirms talks with Estée Lauder to merger their businesses. OVERWEIGHT.
At Monday’s closing bell, PUIG (€ ~10 Bn market cap after climbing ~+13% yesterday; € ~5.04 Bn sales) made public it is in talks with Estée Lauder (EL; € ~25.34 Bn market cap; € ~13.14 Bn sales) for a possible merger. The deal would be aimed at creating the second largest group in the sector (number 1 L’Oréal with € ~44.05 Bn of sales), with greater product and geographic diversification. We believe that the deal would be conducted through share exchange (we assume a +20% premium vs. € 15.57/sh. Monday’s close) and cash (€ ~1.5 Bn; ~17% yield), meaning a total premium >+35% and €~21.0/sh. levels, with the Puig family becoming the second largest shareholder. In terms of risks we see the possible difficulty to reach an agreement between the management teams (if reached, the economic details should not represent a problem), and the execution and competition risks (both factors could explain EL’s correction, -16% since the announcement was made).