EUR 100.00 For Business Accounts Only

IBERIAN DAILY 01 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CELLNEX, INDRA, SOLARIA.

Political noise and Automobiles continue to add pressure on the Euro STOXX
European equity markets dropped, dragged down by the risks of more aggressive taxation to large French companies and by the profit warnings battery in the Automobile sector. In the STOXX 600, Energy and Consumer Goods were the only sectors ending in positive territory whereas Automobiles and Travel&Leisure saw the biggest drops. On the macro side, in Germany, September’s preliminary inflation moderated more than expected to 1.6%. From the ECB, C. Lagarde was confident that inflation will be below the target in September (with services inflation moderating) that will allow the ECB to cut rates in October. In the UK, the final 2Q’24 was cut to 0.5% q/q due to the worse performance of public spending and the external sector. In the US, September’s Chicago PMI climbed unexpectedly whereas the Dallas Fed index improved but much less than expected. From the Fed, M Bowman was not comfortable with the fact that core inflation remained above the 2% target. J. Powell was confident in the strength of the economy, betting on 2 rate cuts of -25bps during the rest of the year. In Japan, August’s unemployment rate dropped unexpectedly whereas the 3Q Tankan index improved slightly more than expected. On the geopolitical front, in Japan, the new PM S. Ishiba (considered in favour of tightening financial terms) called general elections that will decide the control of the Parliament on the 27th of October. On another note, Israel is initiating ground attacks in Lebanon.
What we expect for today
Stock markets would open with slight gains on the first day of a month that is normally a good one for stock markets. Currently, S&P futures are down -0.10% (the S&P 500 ended +0.39% higher vs. the European closing bell). Asian markets are rising (China’s CSI closed and Japan’s Nikkei +1.89%).
Today in the euro zone we will learn September’s final manufacturing PMI and September’s inflation, in Spain September’s manufacturing PMI and in the US September’s manufacturing ISM, August’s construction expenditure and August’s job vacancies (JOLTS).


COMPANY NEWS

SOLARIA. 2Q’24 Results above expectations but with 2024-25 guidance and capex/MW cut. OVERWEIGHT.
2Q’24 Results came in above expectations in both sales and EBITDA although below expectations in margins. No new MW were connected to the system, as expected, and SLR has 1,425MW under construction (in line with the 1Q’24). Against this backdrop, the drop in prices stands out (-36% vs. 2Q’23 and -28% vs. 1Q’24) but is partially offset by larger capacity vs. 2Q’23 and by the higher load factor. The company cut its 2024-25 guidance by -7%/18% and -14/-25%, respectively, although it expects to generate around € 1 Bn of cash flow over the 2024-28e period with the new businesses (vs. € 788 M BS(e)). The prices of solar modules continue to drop (-20% in 2024 and -63% since Feb’23), with the company expecting this trend to continue (-13% until the end of the year), leaving capex at around € 0.36 M/MW (-4% vs. previous reference).