EUR 100.00 For Business Accounts Only

IBERIAN DAILY 15 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ANNUAL SPANISH MARKET UPDATE, GRIFOLS.

IBEX above 9,400 ahead of the Fed meeting
With all eyes on the Fed meeting, the session in Europe ended with gains, led by the IBEX, which rose after the poor performance over the past few days. Thus, in the Euro STOXX all sectors except Energy and Travel & Leisure closed with gains, led by Real Estate and Banks. On the macro side, in the euro zone April’s industrial output rose less than expected. In the US, the Fed interrupted, as expected, the rate hikes after 10 consecutive increases, suggesting up to 2 new rises before the end of the year although the market is not yet believing this option. In Brazil, April’s retail sales rose less than expected. In China, industrial output and retail sales for April moderated more than expected, as well as the investment in fixed assets whereas home prices saw the first and slight YoY rise since Apr’22, which is suggesting that the residential segment remains depressed but is hitting bottom. On another note, as expected, the PBoC cut the marginal lending facility (MLF) by -10bps to 2.65%.
What we expect for today
European stock markets would open with slight drops awaiting the ECB meeting. Currently, S&P futures are flat (the S&P 500 ended down -0.26% vs. the European closing bell). Volatility in the US fell (VIX 13.88). Asian stock markets are rising (China’s CSI 300 +0.66%, Japan’s Nikkei +0.44%).
Today the ECB and Eurogroup will meet. In the US we will learn May’s retail sales, Empire manufacturing and Philadelphia Fed for June, as well as weekly jobless claims. In debt auctions: Germany (€ 4 Bn in bonds due 2033).


COMPANY NEWS

ANNUAL SPANISH MARKET UPDATE
Today we are releasing our report on the Spanish market, in which we review our estimates and T.P. for all the stocks in our coverage universe and we highlight the top picks of our portfolios (model, 5-stock, high yield and Mid&Small cap). Throughout 2023, we have been increasing the defensive profile of our portfolios, based on our expectations of an economic downturn and a risk of estimates being revised. But as long as there is a debate on whether there will be a recession or not, we are aware that the cycle could continue to do well, and we continue to include value/cyclical bets such as banks and tourism, at the same time we have reduced exposure to real estate and industrials. We suspend coverage on Técnicas Reunidas and we have dropped Siemens Gamesa and Mediaset after their delistings. We change our recommendation from SELL to BUY in Vidrala, following its poor performance recently in a year we expect to see better results as it progresses. Our changes to T.P. (-1% on average in our coverage universe) have a more cautious slant, with cuts of more than -10% in a dozen stocks: Arcelor (-24%), Ence (-22%), Aedas and Neinor Homes (-21%), Rovi (-16%), Ecoener (-12%) and Telefónica (-11%), and only four stocks with an increase of more than 10%: BBVA (+25%), Amadeus (+23%), FCC (+12%) and Talgo (+10%). Despite this, upside remains appealing, and of the 52 stocks in our coverage universe, 92% have a BUY recommendation and 8% have a SELL recommendation. Our Top-Down valuation of the IBEX as of Dec’23 remains tight at 9,400 points (+2.6% upside), whereas from a Bottom-Up perspective our T.P. for the IBEX for a 12-month horizon stands at 11,758 (+26% upside), with a drop in aggregate EPS’23e of -5.4% vs. 2022 (+0.2% in 2024e).