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IBERIAN DAILY 06 FEBRUARY + 4Q’22 RESULTS. HIGHLIGHTS AND PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAF, HIGHWAY SECTOR, SIEMENS GAMESA.

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 4Q’22 results to be released over the coming days in Spain.

Stock markets end the week with gains once again
Stock markets performed well during a week marked by central banks meetings, pricing in that the end of rate hikes is getting closer and ignoring the hawkish messages conveyed. The Ibex ended the week with gains of +1.6% and remains one of the best-performing indices this year, with a +12% rise, only behind the Italian MIB index. Thus, within the Euro STOXX, almost all sectors ended the week with gains, with Autos and Media leading the way, vs. the worse relative performance of Energy and Utilities. On the macro side, in the Euro zone, January’s final Services PMI was raised slightly. In the US, non-farm employment and wage gains climbed more than expected, with the unemployment rate falling unexpectedly to lows from the past 50 years. On the geopolitical front, the tension between the US and China increases after the first alleged Chinese spy balloon over US skies was shot down. In US business results, Amazon.com and Aon came in better, and Cigna in line.
What we expect for today
European stock markets would open with losses of up to -1%, with cyclical stocks hit slightly harder. Currently, S&P futures are down -0.4% (the S&P 500 ended -0.57% lower vs. the European closing bell). Volatility in the US rose (VIX 18.33). Asian markets are mixed (China’s CSI 300 -1.5% and Japan’s Nikkei +0.6%).
Today we will learn in the Euro zone February’s Sentix index and December’s retail sales. In debt auctions: Germany (€ 5 Bn in 3M & 6M T-bills). In US business results, Tyson Foods, Cummins and Loews, among others, will release their earnings.


COMPANY NEWS

HIGHWAY SECTOR. Proven resilience in an adverse macro scenario.
In spite of the current scenario of rate hikes, we maintain a positive stance on the sector in view of its capacity to pass on inflationary pressures and the defensive nature of its business (historically resilient to cycles). We maintain our positive view on SCYR bearing in mind its higher upside potential (T.P. € 3.25/sh.; +15% upside) and a number of catalysts in the short term that should also improve its risk profile. As for FER (T.P. € 30.00/sh.; +10% upside), we see upside potential as well, as it is still trading -4% below pre Covid-19 levels, a gap that should narrow with the normalisation of traffic (407 ETR; LBJ, Heathrow), the delivery of new assets (I-66; NTE 35WC) and increased toll rates in the 407 ETR.