IBERIAN DAILY 10 JUNE (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AMPER, ARCELORMITTAL, CAF.All eyes on US-China negotiations
The week kicked off without relevant macroeconomic data, with European stock markets sliding slightly except the Ibex that ended with sight gains. In the STOXX 600, the best-performing sectors were Travel&Leisure and Real Estate, whereas defensive industries such as Household and Utilities ended with the biggest drops. On the macro side, the Treasury Secretary S. Bessent and the Trade Secretary H. Lutnick viewed the meeting between the US and China as positive, which could result in lower restrictions on US technology exports in exchange of improved access to rare minerals. The Congressional Budget Office (CBO) warned that the debt ceiling would be reached in Sept’25. In Spain, the BoS cut its GDP forecast’25 to 2.4% vs. 2.7% previously. In Mexico, May’s inflation climbed more than expected to 4.4% YoY.
What we expect for today
European stock markets would open with gains >+0.1%. Currently, S&P futures are up +0.4% (the S&P 500 ended unchanged vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.3% and Japan’s Nikkei +0.9%).
Today in the UK we will learn April’s number of unemployed and unemployment rate, in the US NFIB SMEs confidence and in Brazil May’s inflation.
COMPANY NEWS
AMPER. Initiation of coverage. A solid play in the Defence sector. OVERWEIGHT
2022 marked the start of a new era for AMP, with a significant improvement to the financial structure (with long-term financing going from 30% of the total to 70%) and a reduction to leverage (3.1x NFD/EBITDA’24 vs. >9x in 2021). On the strategic level, the company will look to sell non-strategic businesses in order to focus on high-growth businesses (Defence/Security and Energy/Sustainability). We have very attractive estimates, with a CAGR’25-28e of +18.6% in EBITDA and +43.3% in Net Profit, and thus we reach a T.P. of € 0.20/sh. (+40% upside). Exposure to Defence (31% of sales’25e and 46% of EBITDA’25e) is what contributes the most growth (+20.7% CAGR’25-28e in EBITDA) and should serve as a platform to consolidate smaller/niche companies, creating value for shareholders.
Amper is the parent company of a group engaged in the telecommunications industry. Co. and its subsidiaries are engaged in the research, development, manufacture, sale, repair and maintenance of electronic systems and telecommunication equipment. Co.'s range of expertise includes network management systems, local loop technology, switching center modernization systems, data communications systems, combat radio sets, parking meter engineering, installation and maintenance services, vehicle localization and navigation systems, and energy systems. Products include private and public telephones, digital commutation systems, and cellular phone equipment.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
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