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IBERIAN DAILY 24 APRIL + 1Q'25 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKINTER, ELECTRICITY SECTOR, INDRA.

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’25 results to be released over the coming days in Spain.

Renewed optimism in European stock markets
European stock markets rallied, fuelled by the lower risk perception about tariffs. Within the STOXX 600, almost all sectors (16/20) saw gains, led by Technology and Banks, whereas Utilities and Household posted the biggest drops. On the macro side, in the euro zone, April’s preliminary manufacturing PMI rose very slightly whereas the services PMI fell more than expected, near levels consistent with activity slowdown. In the US, April’s building permits came in worse than expected whereas final housing starts rose much more than expected. April’s manufacturing PMI climbed unexpectedly whereas that of services fell more than expected. The Fed Beige book depicted lacklustre growth and strong deterioration of macroeconomic prospects. As for tariffs, according to the press, the White House would be studying the possibility of cutting tariffs to Chinese imported products by 50% although the secretary of the Treasury S. Bessent later clarified that this would not be a unilateral decision. On another note, the possibility of cutting some tariffs in the automotive sector would be being studied to avoid double taxation (autoparts and metals). Separately, OPEC+ would be studying the possibility of raising production in June amid disputes among its members to meet production quotas and with Kazakhstan raising its production unilaterally. In US business results, Boeing beat expectations, PhillipMorris was in line and AT&T released disappointing figures.
What we expect for today
Stock markets would open with slight profit taking of -0.1% that could increase throughout the session. Currently, S&P futures are down -0.2% (the S&P 500 ended -0.35% lower vs. the European closing bell). Asian markets are climbing (China’s CSI 300 +0.1% and Japan’s Nikkei +0.4%).
Today in Germany we will learn April’s IFO and in the US weekly jobless claims, March’s durable goods orders and March’s existing home sales In US business results PepsiCo, Procter&Gamble, Nasdaq, Hasbro, T-Mobile, Intel and Alphabet (Google), among others, will release their earnings.


COMPANY NEWS

BANKINTER. Results in line with expectations. We raise our T.P. +17% to € 9.08/sh. (-9% potential). UNDERWEIGHT.
1Q’25 results provided a surprise due to extraordinary reasons in total revenues after accruing the banking tax. 19.9% ROTE (19% in 2024). 2.16% NPL ratio (vs. 2.1% in 4Q’24). 12.35% CET1 (vs. 12.41% in 2024). Following a positive share price performance in the past three months (+19% vs. +13% sector) we believe that the market reaction could be negative given the absence of positive surprises on the operating level. We believe that the stock is trading at demanding levels (~1.4x P/TE’25 (vs. 1.0x sector) despite the expectation of a ROTE’25 >17% (>14% sector)). We raise our estimates (revenues-25-27 by +7% on average and Net Profit +15%) and our T.P. by +17% up to € 9.08/sh. (-9% potential), maintaining our UNDERWEIGHT recommendation.