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IBERIAN DAILY 27 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ENDESA, OHLA, REPSOL, SANTANDER.


IBEX unable to break through 13,500 points
It was a cautious session with profit taking in Europe, where the geopolitical (Middle East and Ukraine) and tariff situation (they would go into force next week) curbed the advances. In the STOXX 600, most sectors (13 of 20) closed with losses, led by Autos and Technology vs. Energy and Utilities, which were the biggest winners. On the macro side, in the UK both general (2.8% YoY) and core inflation (3.5%) for February slowed more than expected. In Spain, the final 4Q’24 GDP was lowered -0.1% to 3.4% YoY. Also in the UK, the minister of finances, R. Reeves, presented measures to cut spending (around £ 5 Bn in social measures) and try to improve the budget roadmap, and although the Office of Budget Responsibility sees some improvement in the roadmap through 2030, for 2025 it raised the financing needs and lowered expected growth. France estimates the public deficit will be -5.8% vs. -6.0% initially forecast. In the US, both durable goods orders and core capital deliveries for February rose unexpectedly. Separately, Donald Trump announced 25% tariffs on imported cars (around 50% of those sold in the country) and left the door open to lowering tariffs levied against China in order to aid the sale of TikTok. The Budget Office estimates that in Sep’25 the debt ceiling would be reached if it is not raised.
What we expect for today
Stock markets would open with drops of around -0.4%, with the automotive sector hit by the announcement of tariffs. Currently, S&P futures are up +0.17% (the S&P 500 ended flat vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.39% and Japan’s Nikkei -0.64%).
Today in the euro zone we will learn February’s M3, in Spain February’s retail sales and in the US the final 4Q’24 GDP, weekly jobless claims and February’s pending home sales.


COMPANY NEWS

ENDESA. Buybacks announced... while awaiting the new network framework. OVERWEIGHT
ELE approved a share buyback programme through 2027e for a total of € 2 Bn (~8% of capital), of which € 500 M (~2% of capital) will be implemented after the AGM on 29/04. The programme is consistent with the current dividend policy and with investments from the 2025-27 Strategic Plan. Positive news showing ELE’s commitment to shareholder remuneration (average annual cash dividend yield of 6.0%/6.4% + buyback’25-27e of 8%). We see these plans as feasible, as ELE currently has leeway on its balance sheet (€ 3.0-4.0 Bn) to undertake additional investments or more shareholder remuneration if the network framework were not appealing enough in the end.