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IBERIAN DAILY 05 FEBRUARY + 4Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAF, FERROVIAL, GRIFOLS, OHL, REPSOL.

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 4Q’20 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Stock markets back in green numbers
European stock markets continue to rise, with cyclical stocks rallying after very positive business results, and with value stocks now clearly outperforming growth on both sides of the Atlantic. Thus, in the Euro STOXX Banks and Pharma rallied vs. the drops in Real Estate and Telecoms (although the losses were less than -0.5%). On the macro side, in the UK the BoE meeting brought no surprises, with the most noteworthy aspect being the possibility of negative interest rates, warning that banks would need 6 months to get ready. In the US, weekly jobless claims once again fell unexpectedly, auguring solid job creation data, whereas December’s final capital goods orders, without the most volatile components, were raised.
What we expect for today
European indices would open with gains of +0.5% following the new highs of US indices and fuelled by the good earnings season. Currently, S&P futures are up +0.4% (the S&P 500 closed up +0.4% vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 21.77). Asian markets are rising (CSI 300 +1.1%, Japan +1.4%).
Today in Germany we will learn December’s factory orders and in the US the unemployment rate, non-farm employment and January’s salary gains. In US business results, Estee Lauder, Linde and Zimmer Biomet, among others, will release their earnings.


COMPANY NEWS

FERROVIAL. Warming Up the Engine. BUY.
We cut our EBITDA estimates’20-23e by -6.5% to reflect a slower traffic recovery in Toll Roads (80% T.P.) and a better performance in Construction (5% T.P.). This means an impact of -145% on Net Profit’20-23e due to the effect from the drop in traffic in Heathrow (5% T.P.), meaning only -4% on T.P. (€ 27.00/sh.; +29% upside), and thus we reiterate our BUY recommendation. Despite the quality of its infrastructure assets, FER has slid -13% since Nov’20 highs, being the worst performer in the sector in 2021, with trading levels pricing in stagnated traffic in the 407ETR starting from 2022 and a value near 0 in Airports, a scenario we believe does not make any sense and that will make FER a clear winner once vaccination progresses.