IBERIAN DAILY 23 NOVEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BANKING SECTOR, ENDESA, FCC.Crude oil prices plummet
European stock markets saw gains after the lack of news from the Fed minutes, the ceasefire between Israel and Hamas and the plummeting of crude oil prices. Thus, in the STOXX 600 Travel&Leisure and Real Estate lead gains, whereas Energy, Basic Resources and Financials (Banks and Insurance) ended in negative territory. On the macro side, in the euro zone, November’s consumer confidence improved more than expected although remaining in very negative territory. In the US, weekly jobless claims fell much more than expected whereas durable goods orders dropped in October more than expected. In Mexico, September’s retail sales slowed down unexpectedly. OPEC+ decided to postpone the meeting scheduled on 25/11 to 30/11 due to the lack of an agreement on output and possible cuts in some African countries (Angola, Nigeria, Congo).
What we expect for today
European stock markets would open flat with a slightly bearish slant in view of the expected weakness in November’s PMI data. Currently, S&P futures are up +0.10% (the S&P 500 ended -0.10% lower vs. the European closing bell). Volatility in the US fell (VIX 12.85). Asian stock markets are climbing (China’s CSI 300 +0.35%, Japan’s Nikkei closed).
Today in the euro zone we will learn November’s preliminary manufacturing and services PMI. US markets will be closed for the Thanksgiving holiday.
COMPANY NEWS
ENDESA. Update of 2024-26 Strategic Plan. Optimistic in EBITDA and capex, less so in Net Profit’24. BUY.
EBITDA growth rose compared to the previous plan (to € 17 Bn vs. € 15 Bn previously), but less so in Net Profit (to € 6 Bn vs. the previous € 5 Bn). NFD fell -15% (1.4x NFD/EBITDA’26e vs. 2.3x in 2023e). Gross capex for the period rose to € 8.9 Bn (vs. € 8.6 Bn previously). The company remains committed to its dividend policy, expecting the DPS over the period to be equal to 70% of ordinary Net Profit with a floor of € 1/sh. for the period, which would leave a DPS of € 1.10/sh. in 2024 (vs. € 1.20/sh. from the previous plan due to the lower Net Profit’24 guidance; € 1.17/sh. BS(e)). We expect a positive reaction.
Endesa is engaged in the production, transmission, distribution, and supply of electricity, through hydroelectric, fossil fuel, and nuclear generation. Co. is also engaged in the mining of coal for use in its fossil-fuel electric plants; mining research; land restoration, and environmental monitoring and control.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
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