EUR 100.00 For Business Accounts Only

IBERIAN DAILY 26 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ENDESA, NATURGY, OHLA, ROVI, TALGO.


IBEX close to 13,500
Boosted by the good start to the week in the US and with no new scares on the tariff front, European stock markets rallied, with the IBEX once again leading the way. In the STOXX 600, all the sectors except Retail, Food and Chemicals posted gains, led by Banks and Travel & Leisure. On the macro side, in Germany March’s IFO rose in line with expectations, with better performance in the expectations component. In the US, March’s consumer confidence fell more than expected, with the expectations index at a 12-year low. February’s new home sales rose less than expected, and February’s final building permits were lowered. Meanwhile, A. Goolsbee (Chicago Fed) was cautious towards the rising inflation expectations and warned that the next rate cut could be delayed for quite some time, but he believes rates will be lower for the next 12-18 months. In Mexico, January’s retail sales rose sharply. On the tariff front, Trump warned that he will place tariffs on copper in the next few weeks.
What we expect for today
Stock markets would open flat with a bullish slant, with mining groups benefiting from the hike in short-term copper prices ahead of possible tariffs. Currently, S&P futures are down -0.12% (the S&P 500 ended up +0.09% vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.21% and Japan’s Nikkei +0.70%).
Today in the UK we will learn February’s inflation, in Spain the final 4Q’24 GDP and in the US February’s durable goods orders.


COMPANY NEWS

ENDESA. Time to invest... and grow. We raise our T.P. OVERWEIGHT
We have raised our EBITDA’25e estimates (+6% vs. previous) and through 2027e (+8% annually on average), meaning a CAGR’24-27e of +2.0% BS(e) (in line with consensus, +3.7% guidance) due to the strength in Generation and CX and Networks (higher capex and update to inflation). Despite the investment effort, leverage is low (1.9x NFD/EBITDA), allowing for an appealing dividend yield (average of 6.0%-6.5% or € 1.40-1.44/sh. DPS vs. € 1.50 guidance’27). We raise our T.P. to € 26.11/sh. (+14% vs. previous; +11% upside). Moreover, we welcome the possibility of a better framework in networks than the one considered, where investing € 3.0-4.0 Bn at a financial remuneration rate of 7.5% would bring our T.P. to €~29.00/sh. (+11%; +23% upside).

ROVI. The CMD’25 does not change our view... OVERWEIGHT.
From the CMD’25 we highlight the company’s 2030e sales guidance of between 1.5x and 1.8x vs. 2024, vs. 1.5x BS(e), and EBITDA “without R&D” of between 2.5x and 2.8x vs. ~2x BS(e). We raise our EBITDA’24-26e estimate by +3% to reflect the better performance expected in the gross margin (+200bps on average) and higher R&D spending due to Letrozol ISM. With all this in mind, we raise our T.P. +2% to € 73.00/sh. (+41% upside) and reiterate our OVERWEIGHT recommendation. Although 2025 will be a transitional year on the operating level, we still see an attractive valuation following the stock’s poor performance (-42% since May’24 highs; -61% vs. IBEX) and we see short-term drivers from the new CDMO (74% EV) contracts announced.