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IBERIAN DAILY 21 JULY + 2Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GLOBAL DOMINION, NEINOR HOMES, UNICAJA.

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 2Q’23 results to be released over the coming days in Spain.

Markets remain calm
European markets saw again an increasing performance, where indices ended with gains, particularly the Ibex, in a session highly marked by fears about the Chinese real estate sector and the poor results released by Netflix and Tesla (both below expectations). Thus, in the Euro STOXX, Insurance and Energy led gains whereas Technology and Travel&Leisure saw a contagion effect from the US newsflow. On the macro side, in the euro zone, July’s consumer confidence recovered more than expected although remaining in negative territory. In the US, weekly jobless claims moderated unexpectedly, Philadelphia Fed index remained at June’s levels due to the poor performance of the new orders sub-index and existing home sales dropped more than expected in June. On the geopolitical front, Japan complained about China’s and Russia’s joint military exercises in the Sea of Japan. In Turkey, the second rise in TCBM rates (+250bps) to 17.5% was below expectations (+350bps) although real rates remain in expansive/negative territory. In Japan, as expected, June’s inflation climbed one tenth to 3.3% YoY whereas the core data moderated in line with expectations to 4.2% annually. In US 2Q’23 results, Abbott, Phillip Morris and American Airlines were in line with expectations.
What we expect for today
European stock markets would open with losses of up to -0.5%. Currently, S&P futures are up +0.11% (the S&P 500 ended -0.18% lower vs. the European closing bell). Volatility in the US rose (VIX 13.99). Asian stock markets are sliding (China’s CSI 300 -0.10%, Japan’s Nikkei -0.48%).
Today in the UK we will learn June’s retail sales. In US 2Q’23 Results, American Express, Comerica and Schlumberger, among others, will release their earnings.


COMPANY NEWS

GLOBAL DOMINION, BUY
The 2Q’23 results showed operating performance in line with expectations (€ 37 M of EBITDA vs. € 36 M BS(e) and € 35 M consensus), with +8% organic growth in 2Q’23 BS(e) (vs. +7% BS(e) and more than +5% guidance). NFD fell by -47% to € 86 M (~0.6x NFD/EBITDA BS(e) vs. 1.3x as of YE2022) due to the reclassification of the Los Cerritos wind farm as held for sale (€~80 M of NFD). On the outlook level, the company reiterated its EBITDA guidance’23 of € 150 M (vs. € 148 M BS(e)).
The 2Q’23 results are solid and in line with expectations, and thus we do not expect a significant impact, despite the stock’s lacklustre performance (+9% on the year; -7% vs. IBEX). There will be a conference call today at 10:30 (CET).

2Q’23 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight: (i) IAG (28/07), given that it will continue to show healthy demand with strong prices and lower fuel costs along with a positive outlook for 3Q’23. We do not rule out the possibility of the guidance’23 being raised again (currently more than € 2.3 Bn of EBIT) and that it will be above the consensus (€~2.7 Bn). (ii) Colonial (27/07), where we expect the trend of strong growth in LfL rents to continue (boosted by indexation), although the appraisal could show a slight drop (very much priced in).