IBERIAN DAILY 24 APRIL + 1Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: GLOBAL DOMINION, GRIFOLS, NATURGY, TALGO.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’24 results to be released over the coming days in Spain.
Markets continue to climb
European stock markets celebrated the easing tensions in the Middle East and the start of the 1Q’24 results season. In the STOXX 600 almost all sectors posted gains, led by Technology (SAP released results in line) and Retail, whereas Basic Materials was the only sector in the red and Energy ended practically flat. On the macro side, in the euro zone April’s manufacturing PMI fell unexpectedly, while the services PMI improved more than expected, leaving the composite figure at a comfortable expansion zone. From the ECB, the chairman of the Bundesbank, J. Nagel, stated the need to be convinced inflation is moving towards the 2% target before cutting interest rates. In Spain, the BoS warns about the housing deficit and constant accessibility deterioration if measures are not adopted. On another note, Brussels threatens to cut the four payment to Spain by as much as 40% in view of the failure to comply with all the latest measures pledged. In the US, the manufacturing and services PMIs fell unexpectedly in April, while building permits fell less than expected in March and new home sales rose more than expected. In US business results, PepsiCo, General Motors GE and UPS beat expectations. Tesla released disappointing figures but saved the day with the announcement of a new cheap car.
What we expect for today
Stock markets would open with gains, with better relative performance from growth stocks. Currently, S&P futures are up +0.37% (the S&P 500 ended up +0.20% vs. the European closing bell). Asian stock markets are climbing (China’s CSI 300 +0.10%, Japan’s Nikkei +2.30%).
Today in Germany we will learn April’s IFO and in the US March’s preliminary durable goods orders. In US business results, Meta, IBM, Boeing and AT&T, among others, will release their earnings.
COMPANY NEWS
1Q’24 Results highlights and rest of previews
Of the stocks releasing their earnings over the coming days, on the positive side we highlight Caixabank (30/04), where we expect a strong performance, but we see a risk of disappointment if the 2024 guidance is not raised, as market expectations already beat these levels. We would take advantage to buy on weakness. Additionally, on the positive side we also stress Vidrala (30/04), where selling volumes in Europe, which fell in 2023, should start to provide signs of a change in trend. We expect the 1Q’24 to be one of the weakest quarters in margins in 2024 as the sharp drop in energy costs is softened by hedging.
GLOBAL DOMINION, BUY
The 1Q’24 results showed operating performance in line with expectations (€ 35 M EBITDA vs. € 35 M BS(e) and consensus), favoured by higher margins (12.3% vs. 12.1% BS(e) and 12.5% consensus) that offset weaker sales than expected (+0.6% vs. +2.1% BS(e) and +0.1% consensus). Organic growth reached +5.2%, in line with the company’s target of above +5%. There were no changes to the guidance of sales growth above +5% CAGR’23-26e (vs. +5.8% BS(e)) and above +7% CAGR’23-26e in EBITDA (vs. +6.9% BS(e)).
The 1Q’24 results were in line with expectations, with the guidance maintained, and we do not expect a significant impact, despite the poor recent performance (+1% in 2024; -9% vs. IBEX).
Global Dominion Access SA is a Spain-based company primarily engaged in the construction and engineering sector. The Company's activities are divided into two segments: Multi-technological Services, which offers design, implementation and maintenance of fixed and mobile telecommunications networks, manages sales and distribution processes for telecommunications carriers, as well as renders of inspection, maintenance, repair and renovation services for industrial and energy firms, and Solutions and EPCs, which executes turnkey Engineering-Procurement-Construction (EPC) projects, provides construction, repair and renovation of industrial heating installations, as well as develops processes and other technological and business solutions in numerous sectors. Its services are provided in three areas: Technology and Telecommunications (T&T), Industry and Renewable energies. It operates worldwide in Europe, the Americas, Asia and Africa. The Company is a subsidiary of CIE Automotive SA.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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