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IBERIAN DAILY 09 NOVEMBER + 3Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, GRIFOLS, NEINOR HOMES, NH HOTELES.

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

US mid-term elections fuel optimism
The European stock markets posted gains awaiting the outcome of the US mid-term elections. Within the Euro STOXX, the best-performing sectors were Technology and Media, whereas Energy and Travel & Leisure were the only sectors that ended in the red. On the macro side, in Germany, retail sales increased in line with expectations. From the ECB, J. Nagel stated that rate hikes will continue even if this slows down economic growth. In the US, awaiting the outcome of a very tight mid-term election, where the market continues to anticipate a Republican victory and a balance of power that has historically favoured stock markets. In China, the Govt. opposes Taiwan’s plan to manufacture chips in Lithuania, and will launch a new monetary support plan for the real estate sector. On the macro side, October’s inflation slowed more than expected. In US business results, Du Pont was in line, Occidental Petroleum and Walt Disney worse.
What we expect for today
The European stock markets would open with slight drops. Currently, S&P futures are down -0.25% (the S&P 500 ended -0.4% lower vs. the European closing bell). Volatility in the US increased slightly (VIX 26.23). Asian markets are falling (China’s CSI 300 -0.9% and Japan’s Nikkei -0.6%).
Today we will learn in Mexico October’s inflation, and in the US September’s final wholesale inventories. In US business results, Dr Horton and Wynn Resorts, among others, will release their earnings. In debt auctions: Germany (€ 4 Bn in bonds due 2032).


COMPANY NEWS

NEINOR HOMES, BUY.
The company has released 9M’22 results above our expectations in deliveries/revenues. Revenues totalled € 506 M (+1.4% vs. 9M’21, -0.4% BS(e)) and EBITDA dropped by -15% (-22% BS(e)) due to the lower contribution from the Kutxabank servicing contract (discontinued in May’22). As for pre-sales, they came in at 280 units gross (252 units net) and is apparently quite poor if compared with other developers and HOME’s own pre-sales of the past 6 quarters, which averaged >600 units. However, this would be due to the fact that HOME has less product for sale. The company reiterates its guidance for the full year.
Although deliveries came in higher than we expected, we believe that this will be offset in 4Q, meaning that we do not see a significant impact from a single quarter (from the summer months).