EUR 100.00 For Business Accounts Only

IBERIAN DAILY 05 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA ENERGÍA, ENCE, GRIFOLS, INDITEX, OHLA, TALGO.


Macro data leads to profit taking
The weaker macro situation than expected in the US led to profit taking on the stock markets, despite the falling sovereign debt yields. Thus, in the STOXX 600, the best-performing sectors were defensive ones like Pharma and Utilities, whereas cyclical sectors linked to raw materials like Energy (Brent fell sharply once again) and Basic Materials were the worst performers. On the macro side, in Germany the number of unemployed rose more than expected in May, although the unemployment rate remained stable at 5.9% (in line). By contrast, in Spain May’s unemployment shrank by 59,000, slightly less than its average monthly drop, but reaching its lowest level since Sep’08. At the same time, registered employment (Social Security registrations) slowed to 2.4% YoY from the previous 2.6%. In the US, job openings (JOLTS) in April fell more than expected, showing a labour market that is normalising. In Brazil, the final 1Q’24 GDP rose 2.5%, beating expectations. In China, the Caixin services PMI for May rose more than expected.
What we expect for today
Stock markets would open with gains of more than +0.5%, with financials recovering after the excessive punishment yesterday. Currently, S&P futures are up +0.18% (the S&P 500 ended up +0.56% vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -0.27%, Japan’s Nikkei -1.0%).
Today in the euro zone we will learn May’s final services PMI, in Brazil April’s industrial output and in the US the ADP private employment survey and non-manufacturing ISM (both for May).

COMPANY NEWS

INDITEX. Solid 1Q’24 performance and positive indications in the trading update. BUY
Solid performance in the 1Q’24 results, with LfL sales beating expectations (+10.6% vs. around +9% BS(e) and consensus), although hit by a bigger FX effect (-3.5% vs. around -2% expected). The gross margin improved +14bps to 60.6% (in line with our estimate and vs. +48bps consensus) and operating costs remained under control (+6.4% vs. 1Q’23 and below sales growth). All this allowed EBIT to come in at € 1.64 Bn (+10.3% vs. +8.2% BS(e) and +8.5% consensus). The 1Q’24 sales indications (01 May/03 June) are positive at around +12%, with the 2024 gross margin target remaining stable (+/- 50bps), and the company has slightly raised the negative FX impact to -2% (vs. -1.5% previously). All this should help ITX recover momentum following its lacklustre recent performance (+8% the past three months; -4% vs. IBEX 35).