EUR 100.00 For Business Accounts Only

IBERIAN DAILY 27 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECNOR, GAS SECTOR, INDRA, NEINOR HOMES.

Doubts surrounding progress in peace talks
Stock markets halted the recovery and undid part of the gains achieved this week, awaiting news on the situation with the war in the Middle East. In the STOXX 600, most sectors were in the red (17 of 20), with the best performers being Energy (Brent rallying +5.1%) and Chemicals, whereas Basic Materials and Technology were the worst performers. On the macro side, in Spain the 4Q’25 GDP rose 2.7% YoY (vs. the preliminary 2.6%) and 0.8% QoQ. In the euro zone, February’s M3 fell slightly more than expected, but household and corporate lending continues to grow at a pace of around +3.0% YoY. In the US, weekly jobless claims fell, as expected. In China, industrial profits grew over the first two months of the year to 15.2% YoY vs. the previous 0.6%. In geopolitics, S. Witkoff, sent to negotiate with Iran, insisted that an end to the war is being sought. Meanwhile, Trump postponed until 6 April the attack on Iranian energy plants amid contradictory messages, and the US press is mentioning the possibility of more than 10,000 troops being sent to the area, leaving the door open to the country taking the Island of Kharg, Larak or Abu Musa.
What we expect for today
European stock markets would open with slight gains of +0.5%. Currently, S&P futures are up +0.6% (the S&P 500 ended -0.92% lower vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.41%, Japan’s Nikkei -0.37% and South Korea’s Kospi -0.54%).
Today in the UK we will learn February’s retail sales, in Spain March’s preliminary inflation, in the US March’s final U. of Michigan consumer confidence, in Brazil February’s unemployment rate and in Mexico February’s unemployment rate.


COMPANY NEWS

NEINOR HOMES. We raise our recommendation after the poor recent share price performance. OVERWEIGHT
Following the poor share price performance in the past month (-17%), most likely hit by the impact that the war in Iran could have on growth, rates and cost inflation, we believe it offers again an appealing risk-return ratio, and thus we raise our recommendation to OVERWEIGHT. We also raise our T.P. slightly (+3%) after the end of the second TOB for AEDAS and other adjustments to our valuation model. The stock is trading at 12x P/E’26 and at a -16% discount but one of its main advantages is its extremely high dividend yield in 2026-27. The company itself suggested around € 400 M of dividend payment over the next two years, meaning 25% of its market cap.

GAS SECTOR. CNMC opens public consultation on gas network remuneration methodology.
In Transport the incentives for OPEX, REVU and other new items are strengthened, but the remuneration for supply continuity (RCS) is eliminated. This has a positive impact for ENAG (around € +50 M of annual revenues, to which other revenues linked to renewable gases of around € +20 M could be added), where there is an improvement to operating visibility and dividend sustainability (€ 1/sh.; 6.8% yield) after 2026. In Distribution, the proposed remuneration is +2.3% higher than the previous period, maintaining the current model and adapting it to gas demand. Despite the introduction of incentives for biomethane, the sector believes the improvement is not enough compared to past inflation; in our coverage universe Naturgy would have the most exposure, although with a small weight on domestic gas networks (14% EBITDA’25).