IBERIAN DAILY 12 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IBERDROLA, INDITEX.Trump raises tariffs and takes a toll on Europe’s complacence
Another session of drops on both sides of the Atlantic after Trump’s new announcement ensuring he will double tariffs on steel and aluminium from Canada to 50% starting today. In the STOXX 600, all the sectors ended in the red, led by Travel & Leisure and Pharma, with Utilities and Energy the best performers. On the macro side, in the US February’s NFIB SME confidence fell more than expected, but for the fourth straight month remained above the average over the past 50 years. January’s JOLTS job openings rose slightly more than expected. Separately, Congress approved an extension to federal government funding through September, avoiding a shutdown this Friday. On the geopolitical front, Ukraine accepts the US’s conditions for a 30-day ceasefire, although Russia was not initially in favour. Today the 25% tariffs on steel and aluminium go into effect, and in retaliation the EU announced it will impose tariffs on US$ 28 Bn of US products starting on 01 April and would be studying another US$ 18 Bn of products for mid-April. In Portugal, the minority Govt. lost the no-confidence vote and there will be another election in mid-May.
What we expect for today
European stock markets would open with gains of more than +0.5% awaiting the US inflation data. Currently, S&P futures are up +0.2% (the S&P 500 ended +0.37% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.17% and Japan’s Nikkei +0.05%).
Today in Spain we will learn January’s retail sales and in Brazil January’s inflation.
COMPANY NEWS
INDITEX. Better 4Q’24 Results but with a weaker start to the 1Q’25. OVERWEIGHT
Better 4Q’24 Results with +10.5% LfL sales growth (vs. around +10% BS(e)), with some improvement of the gross margin (+20bps to 54.0% vs. 53.8% BS(e) and consensus) and good cost control (EBIT +16.3% vs. +9.9% BS(e) and +12.1% consensus). The 1Q’25 indications are weak (1 Feb-10 March), with +4% LfL growth (vs. our estimate of high-single-digit), although improving over the last week to +7%. ITX announced targets’25 of a stable gross margin (in line with our estimate and the consensus), -1% FX effect and € 1.8 Bn of investments in 2025 (in line). The company has proposed a DPS’24 of € 1.68/sh. (+9% vs. 2023; vs. € 1.61/sh. BS(e) and €~1.63 consensus; 3.5% yield). We expect a negative reaction (the stock has fallen around -2% in 2025 and around -14% vs. IBEX 35).
Iberdrola is a holding company. Through its subsidiaries, Co. operates in four segments: network business, which includes all the energy transmission and distribution activities, and other regulated activity originated in Spain, the U.K., the U.S. and Brazil; deregulated business, which includes electricity generation and sales businesses as well as gas trading and storage businesses carried on by Co. in Spain, Portugal, the U.K. and North America; renewable business, with activities related to renewable energies in Spain, the U.K., the U.S. and the rest of the world; and other businesses, including the engineering and construction businesses and the non-power businesses.
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