EUR 100.00 For Business Accounts Only

IBERIAN DAILY 24 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ENAGÁS, NATURGY, PUIG BRANDS.

Trump causes a rally
European stock markets rallied and oil prices fell after Trump halted attacks on Iranian electricity plants for five days and stated that negotiations are progressing well, suggesting that the war could end soon. However, the Iranian foreign minister denied any type of talks, as well as the president of the Iranian Parliament, Mohammad-Bagher Ghalibaf, who would maintain talks in Pakistan. With all this in mind, the STOXX 600 rose sharply, with the best-performing sectors being Basic Materials and Travel & Leisure, whereas Energy (oil fell -8.0%) and Household Goods fell the most. On the macro side, in the euro zone March’s consumer confidence contracted more than expected. In the US, January’s construction spending contracted unexpectedly. In Mexico, January’s retail sales rose more than expected. In Japan, February’s general inflation moderated more than expected to 1.6% YoY but with the core data moderating less than expected to 2.5% YoY. In geopolitics, Saudi Arabia and the United Arab Emirates took steps to enter the war, granting the US army access to King Fahd Air Base and thousands of US marines are expected to arrive in the Middle East next Friday.
What we expect for today
European stock markets would open with losses of more than -0.5%. Currently, S&P futures are down -0.4% (the S&P 500 ended -0.4% lower vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.4%, Japan’s Nikkei +1.1% and South Korea’s Kospi +2.9%).
Today in the euro zone we will learn March’s preliminary manufacturing and services PMIs, in the US the final 4Q’25 non-farm productivity and in Mexico January’s IGAE activity index.


COMPANY NEWS

PUIG BRANDS. Confirms talks with Estée Lauder to merger their businesses. OVERWEIGHT.
At yesterday’s closing bell, PUIG (€ ~8.77 Bn market cap; € ~5.04 Bn sales) made public it is in talks with Estée Lauder (EL; € ~25.34 Bn market cap; € ~13.14 Bn sales) that would mean a possible merger. The aim would be creating the second largest group in the sector (number 1 L’Oréal with € ~44.05 Bn of sales), with diversification of products (Fragrances ~71% PUIG vs. ~49% EL’s Skincare) and markets (PUIG ~55% EMEA and ~10% APAC vs. EL ~38% and ~32%, respectively). Bearing in mind the size of both groups, in the light of PUIG’s higher recent growth profile a premium is expected vs. the current trading levels as the Spanish company is trading at a >40% discount at normalized level vs. EL. The Puig family (controlling 72% of the company, 92% of the political rights) could become the second largest shareholder in the resulting group (based on the current stakes).