IBERIAN DAILY 04 DECEMBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: CELLNEX, GRIFOLS, INDITEX, LAR ESPAÑA, MÃSMÓVIL, METROVACESA.MARKETS YESTERDAY AND TODAY
More fuel on the trade war fire
European markets fell once again yesterday, led by the UK and Switzerland, although the DAX managed to remain in positive territory. In the Euro Stoxx, the best-performing sectors were Utilities and Real Estate vs. Basic Resources and Banks, which ended with the worst performance. On the macro side, in Spain registered unemployment rose sharply, while Social Security registrations continued to follow the trend of a gradual drop in the YoY rise from the past few months (2.28% vs. 2.3% in October). In the US, in politics, Trump criticised his European allies for military budget overshoots ahead of the NATO meeting. As for trade talks, Trump left the door open to delaying the agreement with China until after the US presidential election in November’20. In Japan, the final services PMI was cut slightly to 50.3. In China, the Caixin services PMI rose more than expected to 53.5 from the previous 51.1, whereas in India it recovered to 52.7 from the previous 49.6%.
What we expect for today
The markets would open with gains of +0.5%. Currently, S&P futures are unchanged (the S&P 500 was up +0.40% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 15.96%). The Asian markets that are open are falling (Hong Kong -1.07% and Japan -1.05%).
Today in the euro zone we will learn November’s final services PMI, in the US ADP private employment and non-manufacturing ISM and in Brazil October’s industrial output. Debt auctions: Germany (€ 3 Bn in bonds due 2029).
COMPANY NEWS
INDITEX. 3Q’19 Estimates. BUY.
The company will release its 3Q’19 results on the 11th of December. The stock’s current trading levels are more or less the same as in the last results presentation (mid-September), although it has underperformed the sector (-6%) and the IBEX 35 (-3%). We expect a neutral performance if expectations of higher growth rates thanks to a favourable FX effect (+1.3pp) at met, with +4.5%. LfL sales growth, leaving +12% up to € 0.37/sh. in EPS. The cannibalisation of sales in physical stores by the online channel and the impact that this may have on margins could, once again, draw the market’s attention.
GRIFOLS. The moment of truth for AMBAR. SELL.
The company will unveil the full results of the phase III EMA and phase 2b FDA studies on AMBAR (~8% of our € 30.50/sh. T.P.) for Alzheimer at San Diego’s CTAD Congress (US). These results will be relevant, as in addition to further information it could dispel doubts on the commercial strategy (presentation of the study to the EMA/FDA and/or search of off-label use). According to our estimates, the stock is pricing in ~30% chances of success vs. 20% in our case, and thus in order to see >15% upside we should assign ~60% chances of success and necessary data will be necessary to confirm/improve the efficacy levels and greater evidence through neuroimaging and biomarkers.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Lar Espana Real Estate SOCIMI SA is a Spain-based company primarily engaged in the operation of retail Real Estate Investment Trusts (REITs). The Company specializes in acquiring, managing and renting real estate assets within the Spanish market. Its business activities are divided into three segments: Shopping Centers, Offices, as well as Logistics. The Shopping Centers area is responsible for operation of a number of shopping malls, namely Txingudi, Las Huertas, Albacenter, Anec Blau, Hiper Albacenter, and Nuevo Alisal, among others. The Offices segment invests in office properties, such as Arturo Soria, Cardenal Marcelo Spinola, Egeo and Eloy Gonzalo. The Logistics division focuses on managing logistics warehouses, including Alovera I and Alovera II. The Company also owns a plot for residential properties development. It is a parent of a number of entities, such as Lar Espana Inversion Logistica SA, Gran Via Centrum Holdings SAU, Global Noctua and Puerta Maritima Ondara.
Masmovil Ibercom SA, formerly World Wide Web Ibercom SA, is a Spain-based company primarily engaged in the telecommunication sector. The Company focuses on the sale and distribution services for Internet, Data Center and Telecommunications. The Company's product and services portfolio comprises Internet access through Asymmetric Digital Subscriber Line (ADSL) and Symmetric Digital Subscriber Line (SDSL) technologies, Internet domains and Domains Management and Registration Service through IberDNS application, Web hosting, virtual servers, dedicated servers, telephony services and routers. The Company also offers collocation services through two Internet Data Centers located in Madrid and San Sebastian. It operates through subsidiaries, such as Embou Nuevas Tecnologias SL and Ebesis Sistemas SL, among others. The Company owns a number of brand names, such as Pepephone, Yoigo and Llamaya.
Metrovacesa SA, formerly Metrovacesa Suelo y Promocion SA, is a Spain-based real estate developer. The Company specializes in construction and sale of sustainable housing, both single-family and multi-family residential properties. Its activities also include promotion, urbanization and parceling of real estate in general, as well as real estate management for own benefit or on behalf of third parties. Its asset portfolio includes more than 6 million square meters of building land across Spain, as well as already developed properties in cities, such as Malaga, Almeria, Cordoba, Barcelona and Madrid, among others.
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