EUR 100.00 For Business Accounts Only

IBERIAN DAILY 21 JANUARY + 4Q’21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKING SECTOR, IAG, SIEMENS GAMESA.

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 4Q’21 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Stock markets rally
The business results calendar and stimulus measures in China fuelled the world’s stock markets but gains eased in the US at the end of the session. Thus, within the Euro STOXX, Travel & Leisure and Utilities stood out, whereas Autos and Energy saw the biggest drops. On the macro side, in the Euro zone, December’s preliminary inflation figure was confirmed (5.0%), as was the case with core inflation (2.6%). From the ECB, the minutes from December’s meeting did not rule out a scenario of high inflation over a longer period, but expressed doubt about a tightening of monetary conditions before time. In this regard, C. Lagarde justified a slower response than the Fed’s due to the slower recovery and a notably weaker inflation level that, for the time being, is not being passed onto wages. In the US, weekly jobless claims increased unexpectedly, January’s Philadelphia Fed index rose above expectations and December’s second-hand home sales contracted more than expected. In Japan, December’s inflation climbed in line with expectations up to 0.8% YoY whereas the core data rose less than expected. On another note, Toyota, Suzuki, Honda, Nissan announced production cuts due to the lack of personnel and auto parts. In US business results, M&T Bankcorp came in better, whereas Keycorp, Union Pacific and American Airlines were in line. Netflix released disappointing subscribers data.
What we expect for today
European stock markets would open with losses of around -1.5%, with slightly worse performance from growth (tech stocks), which should turn around throughout the session thanks to the falling interest rates on a day when geopolitical tensions between Russia-US and Europe. Currently, S&P futures are down -0.55% (the S&P 500 ended -2.3% lower vs. the European closing bell). Volatility in the US rose (VIX 25.59). Asian markets are falling (China’s CSI 300 -0.9% and Japan’s Nikkei -0.9%).
Today we will learn in the Euro zone January’s consumer confidence. In US business results, Huntington, IHS Markit and Schlumberger, among others, will release their earnings.

COMPANY NEWS

SIEMENS GAMESA. Poor preliminary 1Q’22 results and cut to annual guidance. Conference call 8:00 (CET). SELL
At the closing bell the company released preliminary 1Q’22 results with sales -12% below expectations and adjusted EBIT of € -306 M (vs. € -120 M BS(e) and € -67 M consensus) due to provisions and cost overruns in the onshore division (totaling € -289 M) stemming from supply chain disruptions and difficulties in the ramp-up of the 5.X platform (onshore). As a result, SGRE has cut its guidance’22 with (i) sales falling between -9% and -2% vs. 2021 (between -7% and -2% previously; -4% expected) and (ii) the adjusted EBIT margin coming in at between -4% and 1% (vs. between 1% and 4% previously; 1.7% expected). Despite underperforming the IBEX by -57% in the past 12 months, and pending the messages from the conference call, we expect a negative reaction on the share price (T.P. € 17.95/sh, -5% potential).