EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BBVA, NEINOR HOMES, REPSOL.

Volatility reigns
European stock markets were back in the red, with oil prices continuing to climb in a session marked by the growing tensions between Iran and the US/Israel. In the STOXX 600, Technology and Media led the advances, with Household Goods and Basic Materials showing the worst relative performance. On the macro side, in the euro zone January’s retail sales rose more than expected (YoY). The ECB meeting minutes welcomed the solid inflation performance, although they highlighted the rising risks from energy and wages. In Spain, January’s industrial output recovered less than expected. In the US, weekly jobless claims rose less than expected and January’s import prices were surprisingly low, remaining at the same 0.2% MoM from December. In China, the PBoC warned that investors must lower their expectations of a very lax monetary policy. On the geopolitical side, the war in Iran continues to spread geographically, while the US will allow India to once again import Russian oil, and Saudi Arabia has begun to redirect part of its oil production through a pipeline to send it through the Red Sea. In US business results, Costco beat expectations.
What we expect for today
European stock markets would open with gains of around +1.0% in view of the pause in the Brent crude price rally. Currently, S&P futures are up +0.14% (the S&P 500 ended +0.2% higher vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.2%, Japan’s Nikkei +0.6% and South Korea’s Kospi +0.1%).
Today in the euro zone we will learn the final 4Q’25 GDP and in the US non-farm job creation, the unemployment rate and February’s wage gains.



COMPANY NEWS

BBVA. We resume coverage on our top pick in the sector. T.P. € 22.73/sh. (+23% upside). OVERWEIGHT
We like the stock because it trades at attractive levels (1.8x P/TE’26) for a ROTE’26 above the sector average (+140bps vs. Santander), offers a dividend yield with buybacks that is also above average (+8.5% yield), it has underperformed its peers (-5% vs. sector in the past three months) and we see an opportunity of value being generated in a potential sale of the Turkish unit. The company could free up ~310bps of capital (±30bps for every ±10% in Garanti’s share price), generating a new excess we did not include in our estimates of €~10 Bn (+8% on our T.P.). Our valuation means implied multiples of 10x P/E’28e and 2x P/TE’28e. Every ±50bps of Ke has an impact of ±5.6% on the T.P., and ±50bps of ROTE’28 has a ±2.2% impact.