EUR 100.00 For Business Accounts Only

IBERIAN DAILY 11 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CELLNEX, MELIÁ HOTELS, REPSOL.

ECB speeds up stimulus withdrawal despite the war in Ukraine
In the end the ECB announced that it will speed up the reduction to purchases in the SPP programme, which will be completed by 3Q’22, leaving the door open to rate hikes in 4Q’22, but only if its optimistic base-case scenario materialises and not the more adverse ones, the figures of which we will learn today. Despite this outpour of optimism, the negative opening on the US stock markets dragged European markets down a bit further, which ended with losses of more than -3% and with the IBEX performing better thanks to the boost from domestic banks. Meanwhile, the meeting between Russia and Ukraine brought no progress. In the Euro STOXX, only Basic Materials managed to close without losses, with Autos and Retail the worst relative performers. In the US, February’s inflation sped up in line with expectations to 7.9% YoY and weekly jobless claims rose more than expected. In the Euro zone, the summit of government leaders confirmed the target of energy independence and the increase in Defence spending, but there was no unanimity on Ukraine’s accelerated EU membership.
What we expect for today
European stock markets would open flat with a slight bullish slant, with value performing better than growth, but with no drivers, which could take the wind out of its sails towards the end of the session. Currently, S&P futures are up +0.12% (yesterday the S&P 500 ended +0.84% higher vs. the European closing bell). Volatility in the US fell (VIX 30.23). Asian markets are mixed (China’s CSI 300 +0.4%, and Japan’s Nikkei -2.05%).
Today in Spain and Germany we will learn February’s final inflation, in the UK January’s industrial output and in the US the University of Michigan consumer confidence. In debt auctions: Italy (€ 7.75 Bn in bonds due 2024, 2029 and 2037).

COMPANY NEWS

MELIÁ HOTELS. From Omicron to the war... we see long-term value. We raise our T.P. to € 7.71/sh. (upside +27%) and upgrade our recommendation to BUY.
Omicron has brought more confidence that the end of Covid-19 is near and the 4Q’21 results shed more light on MEL’s capacity to be more profitable in a normalised situation. The impact from the Russia-Ukraine war would be limited to the risk of its clients having less disposable income due to inflation (although this was the case before the conflict), but we think the excess savings along with the pent-up demand will allow this to be offset. With all this in mind, we have raised our sales’22-24e estimates by +5.4% and by +10% in EBITDA based on: (i) an update to the openings plan; (ii) the improved Revpar; and (iii) the business’s operating leverage as well as the strong cost performance in 2021 that brings optimism for the future (larger share of the direct sales channel and digitalisation). We upgrade our recommendation to BUY (from SELL).

IBEX Technical Advisory Committee Meeting. No changes on IBEX 35.
At yesterday’s closing bell the IBEX 35 Technical Advisory Committee decided not to make any changes to the IBEX 35 (neither its composition nor the stocks’ weights), as we expected.