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IBERIAN DAILY 29 OCTOBER + 3Q’25 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: COLONIAL, ENAGÁS, ENCE, ENDESA, FERROVIAL, REDEIA, 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’25 results to be released over the coming days in Spain.

Ibex 35 above 16,080
Mixed bag on European stock markets with the “periphery” and the FTSE in positive numbers, compared to the core indices and the Swiss SMI in the red. In the STOXX 600, the biggest gains were in Telecoms and Utilities, followed by Basic Materials and Banks, with the biggest drops in Pharma, Real Estate and Household Goods. On the macro side, in the US the Richmond manufacturing index improved more than expected in October. October’s Conference Board consumer confidence fell less than expected and the FHFA housing prices index rose unexpectedly in August. In Mexico, the unemployment rate rose to 3.0% in September. On the geopolitical front, Israel’s PM, B. Netanyahu, ordered attacks on Gaza be resumed after Hamas failed to comply. In China, the government reiterated to boost consumption and technology over the next 5 years. In US business results, PayPal and Invesco beat expectations, UnitedHealth, Welltower and Sysco were in line and NXP Semiconductors released disappointing earnings.
What we expect for today
European stock markets would open with slight corrections of -0.2%. Currently, S&P futures are up +0.25% (the S&P 500 ended flat vs. the European closing bell). Asian markets are rising (China’s CSI 300 +1.0% and Japan’s Nikkei +2.2%).
Today in Spain we will learn the first reading of the 3Q’25 GDP and September’s retail sales and in the US the Fed will meet. In US business results Kraft Heinz, PPG Industries, Caterpillar, Verisk, Boeing, Starbucks, Meta, eBay, Alphabet and Microsoft, among others, will release their earnings.


COMPANY NEWS

ENCE. Poor results in line with expectations. We lower our estimates and T.P. OVERWEIGHT
3Q’25 sales fell -17.6% (vs. -16.5% BS(e)), with pulp falling -23.4% (73% sales) and renewable energy growing +1.8% (17% sales). 3Q’25 EBITDA came in at € 12.7 M (-75.4% vs. -79.1% BS(e)), with pulp EBITDA at € 4.3 M (vs. € 42.2 M in 3Q’24) and renewables EBITDA at € 8.4 M (-10.6%). Following these results, we lower our estimates for 2025-27e by an average of -14.2% in sales and -41.1% in EBITDA. Our current estimates include a CAGR’25-27e of +4.5% in sales and +33.3% in EBITDA, in an environment in which pulp demand continues to grow (+4.7% in 2025). With this in mind, we cut our T.P. to € 3.70/sh. (-21.2% vs. previous; +36% upside).

ENDESA, UNDERWEIGHT
Good 9M’25 results, above consensus expectations and BS(e). 9M’25 EBITDA totalled € 4.22 Bn (+8.8% vs. 9M’24, vs. +6% BS and consensus) thanks to the improvement in Gx+Cx businesses with resilient margins and lack of temporary tax. 9M’25 Net Profit came in at € 1.71 Bn (+22% vs. 9M’24 and +15% BS and consensus) due to the financial result and the lower tax rate. The company reiterated its annual guidance, at the top end of the range (EBITDA’25e € 5.4/5.6 Bn/ Net Profit’25e € 1.9/2 Bn, in line with consensus and BS).
We expect a positive market reaction. In the Conference call (10:00 CET) the focus will be on the second proposal for the transmission remuneration methodology presented by the CNMC and the expectations on the potential improvement of the circular on the financial remuneration rate, which should be in line with the future capex strategy (vs. shareholder remuneration). We will also pay close attention to Almaraz plant due to the urgent operating shutdown expected over the coming months. In view of the good share price performance (+51% vs. +42% IBEX) and the current uncertainties about the CNMC’s possible improvement of the financial remuneration rate circular (in order to meet ELE’s remuneration target of 7.5%) we maintain our UNDERWEIGHT recommendation (-6% potential).

FERROVIAL. 3Q’25 results in line on the operating level and with no big surprises. OVERWEIGHT
The 3Q’25 results were slightly below expectations in EBITDA (€ 376 M vs. € 401 M consensus and € 405 M BS(e)), with solid performance in Toll Roads (€ 255 M EBITDA vs. € 256 M consensus; +4% vs. 3Q’24), where the Managed Lanes confirmed the positive toll performance seen in 1H’25 (growing between +8% and +26% in 3Q’25 vs. soft cap of 2.9%). Construction also was very much in line with expectations (€ 120 M EBITDA vs. € 125 M consensus). Net cash ex-infra reached € 706 M, beating our estimate of € 588 M and driven by divestitures and capex kept in check. We do not rule out a negative slant in the reception following the solid recent performance (+21% since 2Q’25 results; +9% vs. IBEX).

REDEIA. 9M’25 results in line. There will be no conference call. OVERWEIGHT
The 9M’25 results are in line with expectations (both ours and the consensus). 9M’25 EBITDA reached € 950.9 M (+2.7% vs. 9M’24, vs. +2.7% BS(e) and consensus) and Net Profit € 389.9 M (-4.6% vs. 9M’24, vs. -3% BS(e) and consensus), re-expressed without Hispasat. All this is in line with meeting the 2025 guidance, which the company reiterated: EBITDA above € 1.25 Bn and Net Profit at € 500 M (same as our estimate and the consensus). NFD’25 of around € 5.7 Bn, floor DPS of € 0.80/sh. (all in line with BS(e) and consensus). RED approved the first interim dividend’25 of € 0.20/sh. (1.2% yield; flat vs. 2024 and as expected), payable in Jan’26. There will be no conference call. We do not expect an impact from these results.

SANTANDER. Beats Net Profit expectations by +2%. Guidance unchanged. We expect a negative market reaction. OVERWEIGHT.
Few surprises on the operating level. We stress the good figures in costs (-0.6% vs. expectations), provisions (-2.4% thanks to Retail and Corporate Centre) and taxes (-9% due to lower effective rate of 25.1%). 16.1% ROTE vs. 16.5% guidance’25. 13.1% CET1 vs. 13% in 2Q’25 vs. 12-13% guidance’25. 113bps of COR vs. 114 in 2Q’25 and 2.92% NPL ratio (vs. 2.91% in 2Q’25). The bank kept its guidance unchanged. We expect a negative market reaction due to the lack of surprises. SAN share price has reported a positive performance in the past 6 months (+32% vs. +23% sector). Notwithstanding, it continues to yield upside (1.4x P/TE’25e; 9.7x P/E’25e) for a 15.5% ROTE’25. OVERWEIGHT. T.P. € 10.15/sh. (+18% upside).