EUR 100.00 For Business Accounts Only

IBERIAN DAILY 05 NOVEMBER + 3Q’25 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRIFOLS, TELEFÓNICA.

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 3Q’25 results to be released over the coming days in Spain.

Stock markets tentative
By contrast to Monday, yesterday stock markets ended better than they opened, although most ended in the red, with tech stocks linked to AI leading the drops after the rally over the past few weeks. In the STOXX 600, Real Estate and Food were the sectors rising the most, with Basic Materials (which led the drops for the second straight day) and Telecoms falling the most. On the macro side, in Spain the number of unemployed rose by +22,000 (-64% vs. average monthly increase), leaving registered unemployment at a low since Oct’07, whereas Social Security registrations remained at a pace of 2.4% YoY. In the US, the govt. shutdown is now the longest in history, lasting more than 35 days, although some Senators are more optimistic towards reaching an agreement in the coming days. In Brazil, September’s industrial output rose more than expected. In China, October’s RatingDog services PMI fell less than expected. In US business results, Pfizer and Uber beat expectations, Global Payments and Marriott were in line.
What we expect for today
European stock markets would open with corrections of as much as -0.50%. Currently, S&P futures are down -0.05% (the S&P 500 ended -0.46% lower vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.37% and Japan’s Nikkei -2.51%).
Today in the euro zone and Spain we will learn the final services PMI and in the US October’s ADP employment survey and non-manufacturing ISM. In US business results, McDonald’s and MetLife, among others, will release their earnings.


COMPANY NEWS

GRIFOLS, OVERWEIGHT
The 3Q’25 results were slightly above expectations on the operating level (€ 482 M adjusted EBITDA vs. € 474 M BS(e) and € 467 M consensus) and in line on the debt level, which remained stable at 4.2x NFD/adjusted EBITDA (vs. ~4.2x BS(e)). On the outlook level, the company expects an impact of € -70 M on EBITDA due to FX in 2025, which we estimate would bring adjusted EBITDA to between € 1.81-1.86 Bn, slightly below the consensus estimate (€ 1.86 Bn). Lastly, the company has slightly improved its FCF’25 guidance to € 400-425 M ex-M&A (vs. € 375-425 previously and € 351 M BS(e)).
Despite the negative FX impact on EBITDA’25e (which means an implied revision of the guidance), we do not expect a significant impact, bearing in mind the poor recent performance (-10% since 2Q’25 Results; -21% vs. IBEX) and the fact that the consensus estimates were already adjusted for this effect.

TELEFONICA. CMD’25-28. We will lower our estimates. OVERWEIGHT, but we see no short-term drivers.
Yesterday the company lowered its FCF’25 guidance by around -27% to € 1.9 Bn (-20% vs. consensus, -16% vs. BS(e)), and it expects a CAGR’25-28 of +3%/+5% which, at the midpoint, is around -19% below the consensus for the 2026-27 period. As for the dividend, the company has confirmed a DPS’25 of € 0.30/sh. (8% yield) and € 0.15/sh. DPS’26 (-50%; 4& yield), and going forward it will be linked to 40%/60% of the FCF base. Assuming a 50% payout of adjusted FCF, the DPS’26e would be around € 0.20/sh. BS(e) (+34%; 5.4% yield) and the DPS’28e € 0.23/sh. BS(e) (+15%; 6.2% yield). The planned shoring up of the balance sheet seems unambitious (~2.5x NFD in 2028 vs. 2.9x currently). TEF leaves the door open to M&A moves, but no details have been given. Yesterday the stock fell -13% (accumulating a -30% drop vs. the sector and -45% vs. IBEX 35 in 2025). We will lower our estimates slightly (-3% in EBITDA for the 2025-28 period) and our T.P. by around -6% to €~4.60/sh., which will leave upside of more than +20%.