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IBERIAN DAILY 29 OCTOBER + 3Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ECOENER, FERROVIAL, 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 3Q’24 results to be released over the coming days in Spain.

IBEX back above 11,900 points
The week before the US election in which the “Magnificent 7” will release their earnings kicked off with moderate gains in Europe, where the falling oil prices spurred consumer goods companies and bond proxies. In the STOXX 600, all the sectors except Autos, Pharma and Energy closed with gains, led by Construction and Media. On the macro side, in Spain September’s retail sales rose unexpectedly. In Germany, the biggest industrial union has started a strike and warns on a closure of VW factories. In the US, the Treasury expects US$ 546 Bn of net issuances in 4Q’24 (slightly less than what was expected in July) and US$ 823 Bn for 1Q’25. In Japan, September’s unemployment rate fell unexpectedly thanks to a smaller active population. In US business results, CenterPoint Energy, Ford and ON Semiconductor were in line with expectations.
What we expect for today
Stock markets would open flat with some bearish bias, awaiting the business results to be released. Currently, S&P futures are flat (the S&P 500 ended -0.07% lower vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.91%, Japan’s Nikkei +0.77%).
Today in the euro zone we will learn the 3Q’24 GDP, in the US August’s housing prices, October’s consumer confidence and JOLTS job openings. In US business results, Alphabet (Google), McDonalds, Paypal and Visa, Mondelez, Chipotle, among others, will release their earnings.


COMPANY NEWS

SANTANDER. 3Q’24 results below expectations in NII (-3%) and above in Net Profit (+4%). OVERWEIGHT
Despite the lower NII, the company beat Net Profit expectations by +4% thanks to lower costs (-3% vs. expected) and provisions (-6%). SAN has maintained its guidance’24: ROTE >16% vs. 16.3% in 9M’24 and CET1 >12% vs. 12.5% in 9M’24 (+17bps organic and -17bps regulatory). We expect a slightly bearish slant to the reception of these results. Following the strong stock market performance over the past three months (+2% vs. +0% European sector), and with today’s results (still below in revenues), little by little the bank is delivering what the market demands. In the medium we term our recommendation is OVERWEIGHT, expecting a rerating in the share price (which is pricing in a Ke of 15.3% vs. 14.4% sector). We think the bank’s diversification could make it resilient in this cycle of falling interest rates.