EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRUPO CATALANA OCCIDENTE, REPSOL, TALGO, TELEFÓNICA, UNICAJA.


The Ibex continues to lead Europe
It was a volatile week for European stock markets, fuelled by business resuts and dragged down by D. Trump’s comments about the implementation of 25% tariffs to Europe. The Ibex climbed around +3.0% last week, exceeding 13,300 points. Thus, in the STOXX 600, Banks and Insurance were the best performers last week vs. Media and Technology that posted the biggest drops. On the macro side, in Germany the number of unemployed dropped as opposed to expectations in February and February’s inflation remained at 2.3% YoY, as expected. In the US, personal outlays dropped as opposed to expectation, with January’s core consumption deflator slowing down, in line with expectations. The Atlanta Fed released a 1Q’25 GDP estimate that would fall to -1.5% YoY due mainly to the smaller contribution from the external sector. On the geopolitical front, the meeting between Trump and Zelensky on Friday ended with a strong argument and with no agreements reached. Yesterday there was a meeting in the UK with the main European countries and Canada to push a peace plan in Ukraine that the US will accept. In China, the Caixin manufacturing PMI for February rose more than expected, hitting a high since June’24.
What we expect for today
European stock markets would open with gains in view of the peace plan agreed yesterday in the UK meeting. S&P futures are up +0.14% (the S&P 500 ended +1.13% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.20% and Japan’s Nikkei +1.16%).
Today in the euro zone we will learn February’s inflation, in Spain January’s consumer confidence and February’s manufacturing PMI and in the US also February’s manufacturing PMI.


COMPANY NEWS

TALGO. Poor results hit by a provision. Guidance below expectations. UNDERWEIGHT
The results were poor, hit by the provision from the Renfe fine (€ 116 M, no impact on cash, resulting from the delayed delivery of 30 VHS trains, of which 27 have already been delivered). Excluding the impact from the fine, EBITDA’24 would have been € 70 M (-10% vs. 2023 and -10% vs. consensus), with a 10.5% margin (vs. 11.7% in 2023 and 11.5% guidance’24), where there were cost overruns in the delivery of the Renfe trains (not detailed). As for the guidance’25, the company expects: (i) € >600 M of sales (vs. € 691 M consensus), (ii) ~11% EBITDA margin (vs. 12.1% consensus), (iii) ~4x NFD/EBITDA (vs. 3.3x consensus), with working capital recovery and CAPEX of around € 25 M (€ +30 M in R&D) and (iv) >1x book-to-bill. The reception would have a negative slant due to the poor results, with the guidance also below expectations and following the increased NFD from 2024.