EUR 100.00 For Business Accounts Only

IBERIAN DAILY 05 FEBRUARY + 4Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAF, SANTANDER.

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.

Tariffs set the pace
European stock markets saw an increasing performance, with all eyes on tariffs, and with the Ibex leading gains after climbing 1.3%. Thus, in the STOXX 600, Autos and Technology led gains vs. Pharma and Financial Services. On the macro side, in France, the vote of confidence presented by the far-left party France Unbowed (LFI) against the PM F. Bayrou is not expected to go through. In Spain, the government approved the draft to reduce the working day to 37.5 hours. In the US, factory orders dropped more than expected and December’s JOLTS job openings dropped more than expected. In China, January’s Caixin services PMI fell more than expected to 51 from 52.2 previously. In US business results, Pfizer and Estee Lauder beat expectations, PepsiCo and Merck&Co were in line and Paypal came in worse than expected. On the geopolitical front, the US warned that it will gain the control of the Gaza Strip, also planning to impose a 10% generalised tariff on the EU whereas the latter is studying retaliations against technology groups.
What we expect for today
Stock markets would open with drops close to -0.5%. Currently, S&P futures are down -0.5% (the S&P 500 ended practically unchanged vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.5% and Japan’s Nikkei +0.1%).
Today in the euro zone and Spain we will learn January’s services PMI, in the US January’s non-manufacturing ISM and ADP private employment survey and in Brazil December’s industrial output. In US business results, Uber, Walt Disney and Ford, among others, will release their earnings.


COMPANY NEWS

SANTANDER: Good 4Q’24 Results (+13% vs. consensus in Net Profit). OVERWEIGHT.
Revenues came in above expectations (+6% in NII and +4% in fee revenues), offsetting other provisions worth € 1.54 Bn (vs. € ~1 Bn expected) due to potential claims in the UK. The bank beat its 2024guidance: ROTE 16.3% and CET1 12.8%. 2025Guidance: (i) Revenues +0% (+0.8% BS(e) and +1.3% consensus); (ii) mid/ single digit growth in fee revenues (+1.9% BS(e) and +0.9% consensus); (iii) Drop in costs (+1.7% BS(e) and +0.4% consensus); (iv) COR 115bps (114 BS(e) and 120 consensus); (v) CET1 12-13% (12.9% BS(e) and 12.7% consensus); (vi) ROTE 16.5% (16.2% BS(e) and +14.3% consensus); (vii) € 10 Bn buybacks (13% yield) in 2025-2026 vs. € ~6 Bn expected. The bank, as expected, will initiate tomorrow a € 1.59 Bn buyback programme (2% yield). We expect a positive market reaction. SAN share price is inexpensive (0.8x P/TE’25e; 6.8x P/E’25e), having climbed less than the sector in 3 months (+5% vs. +8%).