EUR 100.00 For Business Accounts Only

IBERIAN DAILY 16 NOVEMBER + 3Q’21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: SOLARIA.

MARKETS YESTERDAY AND TODAY

At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 3Q’21 results to be released over the coming days in Spain.

Ibex about to hit 9,100 points
The European stock markets ended largely unchanged after October’s strong macro data in China was stained by company news (BBVA, Philips, etc.) and rising Covid-19 cases in Europe. Within the Euro STOXX, the best-performing sectors were Household Goods and Retail, whereas Telecoms and Basic Resources were the worst performers. On the macro side, in the Euro zone, C. Lagarde again ruled out rate hikes despite acknowledging that inflation will remain above the ECB’s target for longer than expected. In the US, November’s manufacturing index climbed above expectations, returning to Sept’21 levels.
What we expect for today
European stock exchanges would trade with mixed results, with basic resources hit by the drop in iron ore to 2018 lows. Currently, S&P futures are down -0.02% (the S&P 500 ended practically unchanged vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 16.49). Asian markets are climbing (China’s CSI 300 +0.15% and Japan’s Nikkei +0.11%).
Today we will learn in the UK September’s ILO unemployment rate, in the Euro zone the 3Q’21 GDP, in Brazil September’s economic activity index, and in the US October’s retail sales, industrial output and November’s NAHB real estate confidence index. In debt auctions: Spain (€ 2.5 Bn in 3M and 9M T-bills).

COMPANY NEWS

SOLARIA. Good 3Q’21 results, but a -40% in expected installed capacity vs. our estimate. BUY.
The 3Q’21 results came in above expectations on the sales and margins level, although, on the negative side, no new capacity has been connected on the quarter. The company reiterated its guidance and provided more visibility into 2024, mentioning projects in public exposure totalling >3,120 MW, meaning that SLR already has very high visibility on how it will achieve its >5.1 GW target (SLR’s target for 2024 vs. 2025-26 BS(e)). However, the company claims that it plans to have connected 1,000MW to the network by the end of 2021 vs. its previous target of 2,150 MW (vs. € 1.675 MW BS(e)) and 2,000 MW in the 1H’22 (vs. 2,439 MW BS(e) for 2022). On the negative side, the company disappointed once again announcing that in 2021 it will stand -40% vs. its previous capacity targets, although it is true that if it met the 1H’22 guidance, it would meet 82% of our installed capacity target for FY2022 BS(e). We expect a negative share price reaction, since although SLR has fallen -34% in 2021, it has rallied +21.5% from one-year lows.