IBERIAN DAILY 03 DECEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CAF, RENEWABLES SECTOR, TALGO.France continues to set the pace
It was a session marked by the political crisis in France and the rising risk premium, where barring a last-minute surprise, on Wednesday there will be a new vote of no confidence on PM Michelle Barnier, leaving the future of the Government in the air. Despite this most of the European indices closed with gains, with the IBEX close to recovering 11,700 points. Thus, in the STOXX 600, the best-performing sectors were Consumer Goods and Retail vs. Real Estate and Energy, which fell the most. On the macro side, in the euro zone November’s final manufacturing PMI confirmed the preliminary 45.2, and October’s unemployment rate remained unchanged at 6.3%, a record low. In Spain the manufacturing PMI fell unexpectedly, but still in a growth zone. In the US, the manufacturing ISM rose more than expected to a high since April. From the Fed, R. Bostic (Atlanta Fed) warned that the December rate cut is not definitive, whereas C. Waller was in favour of waiting in view of the latest inflation data. In China, Wednesday would see the start of the Central Economic Work Conference, where the deficit for next year could be placed at -4.0%, although without getting into details on GDP targets.
What we expect for today
Stock markets would open with gains of up to +0.3%, with all eyes on France. Currently, S&P futures are flat (the S&P 500 was +0.15% higher vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.2%, Japan’s Nikkei +2.0%).
Today in the US we will learn October’s JOLTs job openings and in Brazil the 3Q’24 GDP.
COMPANY NEWS
RENEWABLES. There is fuel for rises. We maintain OVERWEIGHT in IBE, ANA, ANE and ENER. We change SLR to UNDERWEIGHT.
In 2024 the sector has continued to lag on the stock market (-20% S&P Global Clean Energy Index vs. +20% IBEX and vs. +20% S&P Global) and is trading at low multiples (16x). Most of the uncertainties are now tailwinds in 2024: (i) improved electricity demand, (ii) lower installation costs and (iii) falling interest rates, while the price situation has also improved, asset rotation is gaining traction and the installation calendar moves along at pace. Although Trump’s victory in the US has added uncertainty, we believe the risk would be limited. With this in mind, we think it would be a good time to selectively increase exposure to the sector. After revising our estimates, we maintain an OVERWEIGHT recommendation in IBE (our top pick due to its diversification), ANA, ANE and ENER (our favorite among S&M). By contrast, in SLR, after lowering our installed capacity estimate, we lower the T.P. -40% and change our recommendation to UNDERWEIGHT.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.