IBERIAN DAILY 10 MAY + 1Q'24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CAF, FERROVIAL, MELIÁ, SACYR.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 1Q’24 results to be released over the coming days in Spain.
IBEX, bringing up the rear in Europe
Most European indices saw an improvement over the course of the session, despite the increased tension in the Middle East and along with new rises in sovereign debt yields. The IBEX, despite falling, managed to stay above 11,000 points. In the STOXX 600, Basic Materials, Household Goods and Energy led the gains, whereas Autos and Travel & Leisure posted the biggest losses. On the macro side, in the UK the BoE kept interest rates unchanged at 5.25% but insinuated that the first cut could come in the June meeting. In Mexico, April’s inflation rose more than expected. On another note, according to Bloomberg, the US administration will announce next Tuesday the new tariffs to be imposed on key products (electric cars, batteries) from china. In the US, weekly jobless claims rose more than expected. In US business results, Warner Bros released worse earnings than expected, Viatris was in line and Constellation Energy beat expectations.
What we expect for today
Stock markets would open with slight gains € 8.00/sh.
SACYR. CMD’24: With room to continue generating value. BUY.
From the company’s CMD’24 we stress the pledged equity of € 700 M (2024-27), which could be raised by additional € 300 M, and the change to cash dividend (vs. scrip format currently) worth € 225 M minimum in 2025-27 (>3% yield). The company updated the value of its concessions to € 3.55 Bn (2.1x equity invested vs. 1.4x BS(e)) and announced it will set up a vehicle to include its brownfield concessions (valued at between € 1.7 Bn and € 2 Bn) where it will incorporate a minority partner. We raise our T.P. by +22% up to € 4.15/sh. (+16% upside) after updating the concessions value (+9%) and including a more favourable cash performance (FCF’24-27e > € 130 M/annually). Despite the good share price performance (+5% vs. IBEX YTD), we reiterate our BUY recommendation.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Melia Hotels International is the parent company of a group engaged in the acquisition, management and operation of hotels. Co. operates its hotel network in Germany, Argentina, Brazil, Bulgaria, Cabo Verde, Chile, China, Costa Rica, Croatia, Cuba, Egypt, Spain, United States, France, Greece, Netherlands, Indonesia, Italy, Luxembourg, Malaysia, Mexico, Panama, Peru, Portugal, Puerto Rico, United Kingdom, Dominican Republic, Singapore, Switzerland, Tunisia, Uruguay, Venezuela and Vietnam under the followings brandnames: Paradisus Resorts®, Melia Hotels & Resorts®, TRYP Hoteles® and Sol Hotels & Resorts®.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
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