IBERIAN DAILY 25 JUNE (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: FLUIDRA, INDRA, REDEIA, ROVI.Stock exchanges take some breath
The week got off with gains after Friday’s corrections, without significant drivers and awaiting the core consumption deflator to be released next Friday and the first round of the French elections next Sunday. Thus, in the STOXX 600 all sectors with the exception of Technology rose, led by Autos (following the initial talks between the EU and China on the electric vehicle import tariffs) and Banks. On the macro side, in Germany June’s IFO dropped as opposed to expectations, with the expectations component reporting the lowest level since March. From the ECB, Schnabel warned about possible negative surprises in the inflation data and the dependence of future rate cuts on prices.
What we expect for today
Stock markets would open with slight drops and with the oil sector benefiting from the good performance of Brent crude. Currently, S&P futures are up +0.17% (the S&P 500 ended -0.61% lower vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 -0.29%, Japan’s Nikkei +0.73%).
Today in Spain and the UK we will learn the final 1Q’24 GDP, in the US June’s consumer confidence and April’s home prices.
COMPANY NEWS
FLUIDRA, UNDERWEIGHT
Pool Corp, a swimming pool product supplier in the US, announced yesterday (at the closing bell) a cut to its FY2024 estimates in view of the weak accumulated sales since the beginning of the year. The average cut to EPS’24 is -18% (the stock fell -11% on the after market).
According to Pool Corp, the reason for the cut is the weakness in the new pool and remodeling segment, where consumption is more discretional, whereas the maintenance business would be performing well, as expected.
The news is negative for FDR, as the US accounted for 42% of revenues in 2023. That said, we cannot extrapolate 100% of Pool Corp’s performance in the US to FDR, as its product and geographical mix in the country is not the same. In 1Q’24 Pool Corp saw its sales fall -7%, whereas FDR grew +1% (at constant sales and scope of consolidation). So far in 2024, FDR has risen +12% on the stock market, whereas Pool Corp has fallen -13% (not including the foreseeable drop today).
Fluidra is engaged in the manufacture and commercialization of accessories and specific products for swimming pools, irrigation, and water treatment and purification systems.
Indra Sistemas is engaged in the design, development, manufacture, assembly, repair, and installation of computer software and applications. Through its subsidiaries, Co. is engaged in consulting, graphic design and multimedia, web design and marketing, internet development and electronic trade, systems integration and hosting geared business to business and business to consumer, as well as in internet financing and electronic marketing. Co. serves defense and security, transport and traffic, energy and industry, telecom and media, finance and insurance, and public administration and healthcare markets. Co. operates primarily in Europe, the United States, Canada, and Latin America.
Laboratorios Farmaceuticos Rovi is engaged in the sale of its own pharmaceutical products and the distribution of other products for which it holds licenses granted by other laboratories for specific periods, in accordance with the terms and conditions contained in the agreements entered into with said laboratories.
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