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IBERIAN DAILY 03 NOVEMBER + 3Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CIE AUTOMOTIVE, PRISA, UNICAJA.

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

Euphoria in view of the solid macro data
Awaiting the election in the US, the positive surprise in October activity data (China and the US) justified the strong gains on European markets. In the Euro STOXX, sectors (cyclical and value) such as Construction, Banks and Insurance were the best relative performers, whereas Leisure and Technology were the worst performers. In the euro zone, October’s final manufacturing PMIs were a positive surprise, with even the peripheral reading being positive. In the US, the manufacturing ISM also beat expectations, and furthermore it was backed by the new order component. In US business results, FirstEnergy, Lowe’s, PayPal, Skyworks and Emerson Electric beat expectations, with Mondelez in line.
What we expect for today
The stock markets would open with gains of up to +1.0%, awaiting the result of the US election (with Biden leading slightly in some key states, according to CNBC) and where the Leisure sector would continue to be hit by the stricter lockdown measures being implemented in Europe. Currently, S&P futures are up +0.6% (the S&P 500 closed flat vs. its price at the closing bell in Europe). Volatility in the US dropped slightly (VIX 37.17%). Asian markets are climbing (Hong Kong +2.4%).
Today, in the US we will learn durable goods orders and factory orders for September, and the presidential election will be held. Debt auctions: Germany (€ 500 M in 10Y I/L bonds) and Austria (20Y bonds). In US business results, Sysco, Fox and Prudential, among others, will release their earnings.


COMPANY NEWS

UNICAJA. 3Q’20 results, solid performance in core revenues. BUY
The company has generated € 16 M of Net Profit (-63% vs. 3Q’19), slightly below expectations (€ 19 M) due to higher amortisations and provisions. Core revenues performed well (NII +4.21% vs. 3Q’19 and around +1% above expectations; Fee revenues -1.7% vs. around -6% expected), as did operating costs (-9.5% vs. 3Q’19 and -6% expected). Credit quality also performed well, with NPL stocks falling -4.5% vs. 2Q’20 and with accumulated CoR as of 9M’20 reaching 91bps (in line with the 2020 guidance and vs. 85bps expected), of which ~13bps stems from the recurring business and ~78bps from Covid-19 provisions. In Capital, CET1 improved by around 30bps to 14.7% thanks to RWA reductions. With all this in mind, the results were unsurprising, with the underlying performance in line with expectations and with stronger revenues than expected. We expect a positive reaction on the share price.