EUR 100.00 For Business Accounts Only

IBERIAN DAILY 13 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ARCELORMITTAL, INDITEX, SOLARIA.

Markets continue to rise
Despite the surprising increase in US inflation data, which could raise doubts on the start of rate cuts by the Fed in June, stock markets rose on both sides of the Atlantic and the IBEX reached a high since Feb’18 near 10,400 points. In the STOXX 600, all the sectors except Real Estate, Utilities and Telecoms closed with gains, led by Autos and Banks. On the macro side, in the UK February’s ILO unemployment rate rose more than expected. the first rise since July of last year, and the YoY rise in salary gains slowed to July’22 levels. In Spain, the BoS raised the GDP growth forecast’24 up to 1.9% from 1.6% previously. In the US, February’s general inflation rose unexpectedly to 3.2% YoY, with the core figure falling less than expected to 3.8% and with the quarterly average of the monthly rates once again showing inflation near 4.0%. In Brazil, February’s inflation rose slightly less than expected MoM. In Japan, with the wage negotiation season almost completed, the unions obtained the highest rise since 1992, above 4.0% (vs. 3.6% in 2023), underpinning the change of the BoJ’s monetary policy.
What we expect for today
European stock markets would open flat, with some bearish bias. Currently, S&P futures are flat (the S&P 500 ended +0.50% higher vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -0.57%, Japan’s Nikkei -0.26%).
Today in the UK we will learn the 4Q’23 GDP and January’s industrial output and in the euro zone January’s industrial output.

COMPANY NEWS

INDITEX. 4Q’23 results in line. Strong start to 1Q’24 and increased investments’24-25. BUY
The 4Q’23 results were in line in sales (+8.7% vs. +8.3% BS(e) and +8.9% consensus), slightly below in LfL (around +12% vs. around +13% BS(e)) and with the gross margin improving (around +95bps vs. around +75bps expected) and solid cost control (EBIT +20.4% vs. +15.6% BS(e) and +19.4% consensus). Indications for 1Q’24 (01/02 to 11/03) are positive, with LfL up +11% (vs. the estimate of below double-digit growth), and the company has announced targets’24 of a stable gross margin (in line with BS(e) and consensus), around +5% growth in gross store space (around -1.5% with FX) and a big increase to investments, which rise to € 1.8 Bn in 2024 and € 900 M of one-offs annually in 2024-26 (logistics). ITX has proposed a DPS’23 of € 1.54/sh. (+28% vs. 2022, vs. € 1.41/sh. BS(e) and €~1.57 consensus). With all this in mind, strong performance and outlook, which should help maintain the positive momentum (around +4% in 2023; around +1% vs. IBEX 35).