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IBERIAN DAILY 07 MAY + 1Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AMADEUS, FERROVIAL, IAG, NH HOTELS.

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’21 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Europe consolidates the levels reached
European stock markets consolidated the new highs despite the fact that several Fed members continued to rule out discussing a tappering. Thus, the Euro STOXX slid -0.2% with the better performance of Food and Chemicals vs. Technology and Real Estate that ended with the biggest drops. We stress the recovery of the Pharmaceutical sector after A. Merkel ruled out the US plan of giving up the Covid-19 vaccine patents (the EU opened the door to its discussion). On the macroeconomic level, in the euro zone, March’s retail sales rose more than expected. In the UK, the BoE announced a reduction of the weekly purchases of £ -1 Bn to £ 3.4 Bn although it kept the general purchase programme unchanged and raised 2021 GDP to 7.25% from 5.0% previously. In China, both April’s exports and imports speeded up above expectations, tripling March’s trade surplus. Meanwhile, April’s Caixin services PMI climbed more than expected. In US Results Linde and Zoetis beat expectations.
What we expect for today
The European indices would open today with gains of +0.5% with the good performance of cyclical stocks, underpinned by China’s good macroeconomic data. Currently, S&P futures are up +0.1% (the S&P 500 ended +0.5% higher vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 18.39). The main Asian markets are trading with mixed results (China’s CSI -0.15% and Japan’s Nikkei +0.15%).
Today in Germany we will learn March’s trade balance, in Spain, March’s industrial output, in Mexico April’s consumer confidence, and in the US non-farm job creation, the unemployment rate, April’s wage gains and March’s final wholesale inventories. In US business results, Cigna, Edison and Ventas, among others, will release their earnings.


COMPANY NEWS
AMADEUS. 1Q’21 results slightly below expectations. No guidance given. SELL.
The 1Q’21 results were somewhat worse than expected in sales, but in line with the consensus in adjusted EBITDA (€ 54 M vs. € 66 M BS(e) and € 51 M consensus). By divisions, in Distribution (34% sales), revenues fell less than we expected (-58% vs. -63% consensus), affected by the drop in travel bookings (-79%, similar to what was seen in 4Q’20). In IT Solutions the drop was smaller (-46%), but worse than we expected (-39%), with passengers boarded plummeting -65.4%. As for the cost-saving programme, the company indicates that it is on track to reach € 550 M of fixed cost savings in 2021 vs. 2019 (~25% of EBITDA’19). Lastly, AMS has stated that March was the best month since the pandemic began, and in April there was an additional improvement.The share price has slid -16% vs. IBEX in 2021 and we do not expect these results to be a driver although the comments on the improvements seen in March could mean a positive slant. At current levels we do not still see upside and maintain a cautious stance.

FERROVIAL. 1Q’21 Results in line with expectations. Recovery in sight in Managed Lanes. BUY.
The 1Q’21 Results came in slightly better than expected in Toll Roads (EBITDA € 67 M vs. € ~62 M expected) thanks to the good performance of Managed Lanes (19% T.P.) that reached pre-Covid traffic levels in March with the end of the mobility restrictions. Results in Construction were very much in line with expectations (EBITDA € 41 M vs. €~42 M BS(e) and consensus), where the positive performance of previous quarters continued, and also in cash ex infra (€ ~1.914 Bn vs. € 1.895 BS(e)), allowing the company to keep a robust liquidity position (€ 7.554 Bn). With this in in mind, the positive recent performance of traffic in the US suggests that FER will be a clear winner as the vaccination rolls out, which could mean a positive slant for the market reaction to these results despite its recent performance (+14% since 4Q’20 results;+6% vs IBEX).