IBERIAN DAILY 12 FEBRUARY + 4Q’23 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BBVA, TALGO.At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 4Q’23 results to be released over the coming days in Spain.
“Expectations” of rate cuts condition stock market performance
With all eyes on the upcoming monetary policy moves by central banks and the solid results performance, especially in the US (63% released and a surprise ratio near the historical average of 80%), the EuroSTOXX 50 ended the week in positive numbers, once again near 4,700 points, whereas the IBEX 35 fell, moving away from the 10,000-point reference. In the STOXX 600, the best-performing sectors were Autos and Technology, whereas Telecoms and Utilities ended with the worst relative performance. On the macro side, in the US December’s inflation rose less than initially estimated. In Mexico, December’s industrial output contracted more than expected. In China, both new loans and total financing rose more than expected in January. In US business results, PepsiCo beat expectations and Catalent released worse earnings than expected.
What we expect for today
European stock markets would open with gains of up to +0.3%. Currently, S&P futures are down -0.03% (the S&P 500 closed up +0.32% vs. the European closing bell). Asian stock markets are closed.
Today there are no noteworthy macro data releases. In US business results, Arista Network, Waste and Cadence, among others, will release their earnings.
COMPANY NEWS
TALGO. Talks confirmed, although the TOB is not a given. We change our recommendation to SELL.
The Hungarian consortium Ganz-MaVag Europe Zrt. (Magyar Vagon) confirmed on Friday that it is in talks and negotiating a possible TOB on 100% of TLGO at € 5/sh., although no agreement has yet been reached. The talks are focused on TLGO’s financing subject to changes in control. As the Spanish antitrust body does not allow the offer to be conditioned to obtaining consent from the lending banks for the change in control, the Hungarian group has stated that it is not certain whether it will launch a TOB in the end. Although there is no certainty of a TOB (which would also need the green light from the Government and the main shareholders in TLGO: Pegaso T. 40% and Torrblas 5%), the interest is clear, which would support the idea of pricing in an M&A move on the company. The Spanish antitrust body, which had suspended trading on the stock on Thursday, will lift the ban today at 8:30 (CET). In view of the low additional upside (+5% up to the price offered in the TOB), bearing in mind that the stock is already trading above our T.P. and considering a counter bid unlikely, we change our recommendation to SELL.
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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