IBERIAN DAILY 23 OCTOBER + 3Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CELLNEX.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 3Q’20 results to be released over the coming days in Spain.
MARKETS YESTERDAY AND TODAY
Awaiting the fiscal agreement
Global stock markets saw losses, awaiting new son the US fiscal stimulus plan where N. Pelosi maintains her confidence in reaching an agreement. Thus, in the Euro STOXX, Travel&Leisure saw the highest gains, followed by Food, while Technology and Household reported the biggest losses. In the US, the good macroeconomic data (weekly jobless claims fell unexpectedly and existing home sales climbed more than expected in September) did not prevent the S&P500 cyclical consumption sector from being the worst performer. In Japan, September’s inflation remained in negative territory and October’s manufacturing PMI (48) remained unchanged vs. previously. In US business results, A&T came in as expected, Coca-Cola better than expected, and Intel worse.
What we expect for today
European indices would open with slight gains and distance themselves from support levels, with rallies in the energy and tech stocks hit following Intel’s results. In Spain, we are still awaiting the decision on a possible curfew, with the good news that Germany and the UK have lifted their travel ban to the Canary Islands. Currently, S&P futures are trading unchanged (the S&P 500 was up +0.65% vs. its price at the closing bell in Europe where the results season in the US continues to benefit value vs. growth, which continued to gain ground thanks to the positive performance in autos, energy and banks). Volatility in the US fell (VIX 28.11). Asian markets are rising (Hong Kong +0.4%, Japan +0.1%).
Today in the euro zone we will learn October’s manufacturing and services PMI. In US business results, EE.UU. American Express and Universal Health, among others, will release their earnings.
COMPANY NEWS
CELLNEX. Towers acquired in Poland. BUY
The company has reached an agreement with Iliad to acquire a 60% controlling stake in the company that operates 7,000 of Play’s (Iliad) towers in Poland for € 800 M (3.1% market cap). Furthermore, the agreement includes the possibility of investing up to € 1.3 Bn over the next 10 years to deploy up to 5,000 additional sites (BTS). The deal’s implied EV/EBITDA (IFRS 16) multiple would be ~11.9x (slightly above the 11.4x from the last few acquisitions made in 2020 and compared to CLNX’s trading multiple of 20x). Positive news, although it does not have a significant impact on our valuation.
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.
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