EUR 100.00 For Business Accounts Only

IBERIAN DAILY 12 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRIFOLS, OHLA, TELEFÓNICA.

IBEX saves the day
Awaiting today’s US inflation data, which could give clues on the start of rate cuts by the Fed, the session was one of profit taking for most European indices except the IBEX (rising six of the last seven sessions). In the STOXX 600, most sectors ended in the red, led by Technology and Media, with Real Estate and Food posting the biggest gains. On the macro side, the Eurogroup meeting decided a slightly tightening monetary policy for 2025. In the US, February’s NY Fed survey showed rising 3Y and 5Y inflation expectations (2.7% and 2.9% vs. 2.4% and 2.5% previously), whereas the 1Y expectations remained constant at 3.0%. in US business results, Oracle came in better than expected with good business prospects for Cloud. In Japan, the BoJ governor cooled off the possibilities of a monetary policy shift but he left the door open to do it at a later stage.
What we expect for today
European stock markets would open with gains of up to +0.5%, with tech stocks recovering thanks to Oracle’s results. Currently, S&P futures are up +0.4% (the S&P 500 ended +0.04% higher vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 +0.31%, Japan’s Nikkei -0.06%).
Today in the UK we will learn January’s ILO unemployment rate and the number of unemployed for February and in the US February’s inflation.

COMPANY NEWS

OHLA, BUY
According to the press, OHLA will pay Aleatica (its former concession division; 100% IFM) € 74 M (~35% market cap; ~25% net cash) to close the lawsuits of Colombia’s toll road Río Magdalena and Peru’s Red Vial 4. The company has agreed with Aleatica staggered payments through 2023 and interests of between 5% and 10%. Thus, OHLA has pledged to carry out an early debt repayment depending on several pending arbitration processes.
Negative news, as our T.P. does not assume any cash outflow for these lawsuits. We estimate a -16% impact on our valuation that would fall to € 0.80/sh., still yielding upside, and thus we maintain our BUY recommendation.