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IBERIAN DAILY 09 NOVEMBER + 3Q'20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, DIA, ELECTRICITY/RENEWABLES SECTOR, TELEFÓNICA.

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

A Friday for profit taking
The good macro data in the US and the comments made by D. Trump’s advisor L. Kudlow admitting defeat in the elections fuelled the European indices, yet not enough to reverse losses. Thus, the European stock markets closed down by around -0.5%, with peripheral indices being the worst performers. Within the Euro STOXX, it was yet another negative session for value stocks, with Banks and Autos seeing the biggest drops, although Basic Resources was among the sectors that rose the most, followed by Technology. On the macro side in Europe, Germany’s industrial production slowed more than expected in September, whereas Spain’s contracted somewhat less than expected. The US labour market data continued to show a robust economic recovery in October, with job creation beating expectations. In China, October’s exports performed well. In US business results, Viacom CBS and Marriott Int came in better, and Vestas in line.
What we expect for today
The markets would open with gains of more than +1.0%, boosted by Biden’s win in the US presidential election (vs. a host of allegations from Trump, with many of his advisors skeptical on their effectiveness). Currently, S&P futures are up +1.4% (the S&P 500 unchanged vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 20.9%). Asian markets are rising (Hong Kong +1.3%, Japan +2.1%).
Today, we will learn in Germany September’s trade balance, and in the Euro zone November’s Sentix index. In US business results, McDonald’s and Simon Property, among others, will release their earnings. In debt auctions: France (€ 7.5 Bn in 3M, 6M & 12M T-bills).


COMPANY NEWS

ALMIRALL. 3Q’20 in line with expectations. Reiterates 2020guidance. BUY.
3Q’20 Results in line on the operating level (EBITDA --26% vs –26% BS(e) and –30% consensus). Sales fell -9% as expected (vs–9% BS(e) and -8% consensus) while EBITDA margins showed a +130bp sequential recovery reaching 27,8% (vs 27,5%BS(e) and 26% consensus). No surprises on the Net Profit Line (15 M euros vs 12 M euros consensus). Net Net financial debt fell by -1% ex pension plans to 369 M euros as expected (1,4x ND/EBITDA vs 363 M euros BS(e)). The company reiterates its 2020 guidance (EBITDA between 230 and 250 M euros vs 231 M euros BS(e) and 239 M euros consensus). We expect a neutral or slightly positive share price reaction given its recent performance (+1% since 2Q Results or +6% vs IBEX).