EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 FEBRUARY + 4Q'24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: INDRA, NATURGY, OHLA, REDEIA, SANTANDER, UNICAJA.

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

European stock markets recover from DeepSeek’s setback and end with gains
Despite the initial corrections seen last Friday, European stock markets ended with gains last week, with the Ibex climbing >+3.0% above 12,300 points. In the STOXX 600, Retail and Telecoms led the gains last week, whereas Basic Resources and Industrial were the only sectors ending in negative territory. On the macro side, in Germany, the unemployment rate rose in line with expectations in January to 6.2%, whereas the YoY inflation moderated unexpectedly and the core data fell 4 tenths to 2.9%. In the US, Chicago PMI recovered in January less than expected whereas December’s personal outlays rose more than expected. Separately, Trump signed the order to impose 25% tariffs on products imported from Canada and Mexico and 10% on products from China, threatening with new tariffs for Europe that have not yet been specified. Canada will respond by placing 25% tariffs on US products (in two stages), whereas China and Mexico will also take measures, although no details have been given yet. In China, January’s Caixin manufacturing PMI fell more than expected. In US business results, Exxon beat expectations, Colgate-Palmolive and AbbVie were in line with expectations.
What we expect for today
Stock markets would open with drops of up to -3.0%, as the tariffs announced affect revenues of European companies in general and their margins, but especially dragged down by sectors directly and indirectly linked to tariff risks like Autos, Chemicals, Consumer Goods, Food and Beverages, and to a lesser extent Basic Resources, Leisure through airlines and Banks. The oil sector would benefit from the rising oil prices and the competitive advantage in refining, along with defensive sectors like Telecoms, Household Goods and Pharma, which would also benefit from the USD’s appreciation. Currently, S&P futures are down -2.0% (the S&P 500 ended -1.14% lower vs. the European closing bell). Asian markets are falling (China’s CSI 300 closed, Hang Seng -0.5% and Japan’s Nikkei -2.74%).
Today in the euro zone we will learn January’s inflation and the final manufacturing PMI, and in the US January’s manufacturing ISM. In US business results, Palantir, Tyson Foods and Everest Group, among others, will release their earnings.


COMPANY NEWS

INDRA/REDEIA. Agreement on 89.68% of Hispasat. Both OVERWEIGHT.
IDR has subscribed an agreement with RED to acquire 89.68% of Hispasat’s share for € 725 M. The deal is subject to suspensive conditions and is expected to be closed in 4Q’24. For IDR even though we welcome the deal, the negative share price reaction seen last week (after sliding more than -3%) when the possible agreement was leaked, along with the company’s robust financial position and the positive prospects expected (both in business performance and synergies), lead us to believe that today’s reaction could be more moderate. The price means around 22% of IDR’s market cap and it would increase its NFD/EBITDA ratio by around 1.4x and IDR’s sales by around 6.2% and EBITDA by 31% although with lower growth. Implicit multiple of 6.9x and 5.2x including synergies (vs. IDR’s current multiples of 6.47x and 8.2x BS(e)). For RED we foresee a slightly positive impact as it is above the valuations rumoured in the last few weeks. We estimate a -2% negative impact on our T.P. With this transaction, RED will reinforce its financial and lending capacity to face a demanding investment scenario over the 2025-30 period.