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IBERIAN DAILY 30 APRIL + 1Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAIXABANK, 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 1Q’24 results to be released over the coming days in Spain.

The Ibex is far from highs
European stock exchanges kicked off the Fed’s week (Wednesday) with slight corrections and with sovereign yields tightening. Within the STOXX 600 sectors, Basic Resources and Real Estate saw the biggest gains, whereas Technology and Retail posted the biggest losses. On the macro side, in Spain, P. Sánchez decided to continue as PM and April’s inflation climbed for the second consecutive month to 3.3% YoY in April due to the rise in energy prices. In Germany, inflation remained at 2.2% YoY vs. the increase expected. In France, the 1Q’24 GDP grew more than expected. In the US, the Treasury raised issuance forecasts for the 2Q’24 by US$ 41 Bn up to US$ 243 Bn, expecting to issue US$ 843 Bn in the 3Q. In Japan, March’s unemployment rate climbed more than expected, retail sales grew less than expected and the industrial output recovered more than expected. In China, the official manufacturing and Caixin PMI rose more than expected in April whereas the services PMI dropped more than expected. In US business results, Domino’s Pizza and On Seminconductor beat expectations.
What we expect for today
Stock markets would open with some bearish bias, paying close attention to earnings. Currently, S&P futures are down 0.11% (the S&P 500 ended unchanged vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 -0.32%, Japan’s Nikkei +1.10%).
Today in the euro zone we will learn April’s inflation, in Germany the 1Q’24 GDP and April’s number of unemployed, in Spain the 1Q’24 GDP, in the US Chicago PMI, April’s consumer confidence and February’s home prices, in Brazil March’s unemployment rate and in Mexico the 1Q’25 GDP. In US business results, Amazon, Coca Cola, AMD, Mc Donald, HSBC and Starbucks, among others, will release their earnings.


COMPANY NEWS

CAIXABANK. 1Q’24 results in line with expectations, with improved guidance. BUY.
The bank obtained € 1.01 Bn of Net Profit (+18% vs. 1Q’23), in line with the consensus, with better NII performance (+1.2% vs. 4Q’23; around +3% above expectations) and higher insurance revenues (+21% vs. 1Q’23; around +5% above expectations). Revenues grew +13% YoY (+1% vs. consensus), costs +5% (in line) and Operating Income +13%. Credit quality remained stable, with CoR at 29bps (vs. guidance of ~30bps), and CET1 stood at 12.26% (+10bps vs. Dec’23, in line). The company raised its guidance to mid-single-digit growth in NII (vs. +0% previously and +3% consensus) and to >16% in RoTE (+1pp vs. previous, consensus in line). We expect only a slightly positive reaction, given the recent outperformance (+28% in 3M, +10% vs. sector).

SANTANDER. Better results on operating level, but in line in Net Profit. We expect a neutral reaction. BUY.
The company beat expectations in NII (+5% vs. expected), fee revenues (+3%) and insolvency provisions (-2% / 120bps CoR), but this was offset by other worse results than expected. RoTE came in at 14.9% (16.2% if the bank tax is annualised) vs. 15.1% in 4Q’23 and 16% guidance’24. CET1 stood at 12.3%, in line with 4Q’23 and the guidance’24 of >12%. The NPL ratio came in at 3.10% vs. 3.14% in Dec’23 with stable coverage (66%). The guidance’24 was maintained, but SAN states that it could beat some of its targets. There will be a conference call at 10:00 (CET). SAN is our top pick in the Spanish sector, as despite the fact that it has risen +30% over the past three months (+10% vs. the sector), it still trades at a discount of more than -20% in P/TE’24e vs. its closest peer, BBVA.