EUR 113.68 For Business Accounts Only

IBERIAN DAILY 31 OCTOBER + 3Q’25 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKINTER, CAIXABANK, ELECTRICITY SECTOR, MELIÁ, PUIG BRANDS, SANTANDER, UNICAJA.

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.

Profit taking after Central Bank meetings
European stock markets slid amid 3Q’25 results and the Central Banks meetings. In the STOXX 600, Technology and Travel&Leisure were the best performers vs. Autos and Basic Resources that saw the biggest drops. On the macro side, the ECB unanimously decided to keep interest rates unchanged, with C. Lagarde conveying a more optimistic message about growth. In Spain, October’s inflation rose unexpectedly to 3.1% YoY (and the core data to 2.5%), whereas it slowed less than expected in Germany. In the euro zone, the 3Q’25 GDP climbed 0.2% QoQ, above expectations (with Germany stagnated). In Japan, October’s Tokyo inflation and September’s industrial output rose more than expected. In China, October’s manufacturing PMI fell more than expected to 49 and the services index was practically unchanged. In US business results, Fox, Biogen, Merck&Co, Apple and Amazon beat expectations, Mastercard in line.
What we expect for today
European stock markets would open with slight losses that would turn positive during the session. Currently, S&P futures are up +0.6% (the S&P 500 ended -0.6% lower vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -1.3% and Japan’s Nikkei +1.9%).
Today in Germany we will learn September’s retail sales, in the euro zone October’s inflation, in Brazil September’s unemployment rate and in the US October’s Chicago PMI. In US business results Colgate-Palmolive, Linde, Exxon Mobile and Chevron, among others, will release their earnings.


COMPANY NEWS

CAIXABANK, UNDERWEIGHT
The 3Q’25 results are very much in line with expectations in all lines. Gross margin was +1.1% above expectations, and Net Profit by +1.7%. ROTE came in at 17.4%, the NPL ratio was under control (2.27%) with 24bps CoR over the past 12 months (vs. 24bps in 2Q’25). The capital ratio was unsurprising: 12.44% CET1 vs. 12.5% in June’25. The guidance’25 was raised very slightly and is now in line with the consensus in NII: the company expects a -4% drop in NII (vs. mid-single-digit drop previously and vs. -2.3% BS(e) and -4% consensus). CoR improved to 16% previously and vs. 18.3% BS(e) and 17.3% consensus).
On the positive side we highlight lending, which grew +6.7% vs. 3Q’24 (vs. +3.7% in 2Q’25).
CABK has approved a € 500 M share buyback programme (0.8% yield) that will begin shortly and will pay € 0.1679 (+13% vs. 2024; in line with expectations) as an interim dividend’25 on 07 Nov’25 (ex date 05 Nov’25). Yield 1.8%. Total DPS’25e € 0.49/sh. (+13% vs. 2025). Yield 5.4%.
We expect a very neutral reception. In the conference call we will pay close attention to whether lending growth is sustainable at such high levels or if this is due more to specific comparison effects. If it is sustainable, we believe the share will perform very positively (we expect +3.6% lending growth in 2026 vs. +3.5% consensus). We think CABK is already trading at demanding levels in P/TE (1.9x), which in our opinion is already pricing in the high long-term ROTE (17%).

ELECTRICITY SECTOR. The CNMC sends a 6.58% financial remuneration rate for transmission to the Council of State.
The CNMC has send to the Council of State the methodology for the calculation of the financial remuneration rate of networks for the 2026-32 period that stands at 6.58% vs. 6.46% in July, below that requested by the sector (7/7.5%). Negative news, particularly for those companies with higher exposure to the domestic regulated electricity business such as Redeia (81% EBITDA’25e) and Endesa (36% EBITDA’25e). The Ministry could halt the price if it considers that the CNMC is not respecting the energy policy orientations, and for this purpose it should call a Cooperation Commission. Beyond this, with the financial remuneration rate announced yesterday, Endesa would see the highest impact in our coverage universe (~-10% T.P. to € ~26.00/sh., yielding -16% potential), where we would maintain our UNDERWEIGHT recommendation, as well as Redeia (~-8% T.P. to ~€ 18.70/sh.; yielding +15% upside), where we would maintain our OVERWEIGHT recommendation awaiting possible changes in remuneration.

MELIÁ. 3Q’25 EBITDA in line. Guidance’25 unchanged. OVERWEIGHT
3Q’25 Results in line with expectations in EBITDA although with worse-than-expected margins (31.2% vs. 31.7% BS(e) and 31.9% consensus) explained that RevPAR (O&L) that despite its better performance the comparison was different, with the increase in occupancy prevailing vs. prices, which fell for the first since the end of Covid-19. The company kept its guidance’25 unchanged and the prospects are positive for the 4Q’25 and 2026 with the MICE segment growing +12%. We cut our EBITDA estimates’25 BS(e) slightly by -1,3% to € 541 M due to FX, including the rollover’26, which results in a new T.P. of € 9.60/sh. (+8% vs. previous T.P.; +33% upside) and we reiterate our OVERWEIGHT recommendation.

PUIG BRANDS, OVERWEIGHT
3Q’25 sales above expectations with +6.1% LfL (vs +5.1% BS(e) and +4.2% consensus) thanks to the strong momentum of Make-up (~18% sales; +18.8% LfL) and Skincare (~10%; +10.5% LfL). Fragrances (~72%) slowed down to +2.8% LfL, as expected although the company is optimistic about the 4Q’25 (maintaining growth forecasts in 2H’25 >low single-digit levels expected for the sector). The company confirmed its 2025 targets of +6%/+8% LfL (vs. +7.0% in 9M’25 and around +6% consensus) and raised its forecasts up to the mid-point of the range (vs. bottom range previously).
We expect a positive market reaction following the favourable performance of LfL and the better indications (the share price has slid -24% in absolute terms in 2025; -64% vs. Ibex3 and vs. +11% L’Oréal or -39% Interparfums).

UNICAJA, UNDERWEIGHT
The 3Q’25 results were very much in line with our estimates and above the consensus (+11% vs. Net Profit expected) due to a positive deviation in provisions (-32% vs. 3Q’24 vs. -29% BS(e) and -3% consensus), with 24bps CoR (vs. 26bps in 2Q’25) and the NPL ratio stable at 2.2%. 3Q’25 ROTE came in at 9.8% vs. 9.7% in 2Q’25. Capital benefited from +9bps of asset revaluation (16.1% CET1 vs. 15.8% in 2Q’25).
The guidance was improved slightly: (i) NII’25 above € 1.47 Bn vs. above € 1.45 Bn previously (vs. € 1.48 Bn BS(e) and consensus). We understand this raises the company’s average estimate for the 2025-27 period (above € 1.4 Bn vs. €~1.46 Bn BS(e) and € 1.49 Bn consensus); (ii) it maintains a low-single-digit rise in fee revenues in 2025 (vs. +2.1% BS(e) and +3% consensus); (iii) it maintains +5% in costs (vs. +3.6% BS(e) and +7.9% consensus); (iv) CoR is cut from 30bps to below 30bps (vs. 27bps BS(e) and +26bps consensus); (v) adjusted ROTE is improved to 12.5%, CET1 from ~11% to ~12% (vs. 11.1% BS(e) and 11.6% consensus); (vi) the total buyout is maintained at 85% (60% cash dividend + 25% buybacks).
We expect a neutral reaction with a positive slant. UNI comes to these results having slightly outperformed the sector (+11%; +3% over the past three months).