IBERIAN DAILY 11 FEBRUARY + 4Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IAG, INDRA, TALGO.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’24 results to be released over the coming days in Spain.
Tariffs still setting the pace
European stock markets reacted calmly to the latest comments made by D. Trump announcing 25% tariffs on steel and aluminium imports and insisting on tariff reciprocity. The IBEX, despite bringing up the rear in Europe, rose slightly and remained at a high since 2008. Thus, in the STOXX 600, all the sectors posted gains, led by Energy and Technology, with the worst relative performers being Travel & Leisure and Banks. On the macro side, in the euro zone the Sentix index improved more than expected to a high since July’24 in view of the expected rate cuts and better political outlook in Germany. In the US, steel and aluminium tariffs would come into force on the 4th of March and D. Trump would announce tariffs on other products where there is no reciprocity, such as autos, over the coming days. On the geopolitical front, Hamas has suspended hostage releases, jeopardising the ceasefire with Israel. In US business results, McDonald’s and ON Semiconductor released worse earnings than expected.
What we expect for today
Stock markets would open with slight profit taking. Currently, S&P futures are down -0.23% (the S&P 500 ended +0.06% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 -0.5% and Japan’s Nikkei +0.1%).
Today in the US we will learn SME confidence (NFIB) and in Brazil January’s inflation. In US business results, Coca-Cola y Marriott, among others, will release their earnings.
COMPANY NEWS
IAG. BA should be the new driver again. OVERWEIGHT.
Despite the rally seen in the past year (+121% vs. IBEX and +145% vs. sector), the share price continues to be far from pre-Covid highs (-18%) while we expect the company’s EBIT’24 to exceed 2019 levels by +22%, with a lower leverage (1.2x EBITDA BS(e) vs. 1.4x 2019). We raise our EBIT estimates’24/26 BS(e) by +13%, underpinned by the positive prospects for the sector and based on the fact that BA’s transformation plan would entail a significant improvement in remuneration. Thus, we obtain a new T.P. of € 5.20/sh. (+22.5% upside). Bearing in mind the current trading multiples (-25% discount in EV/EBIT’25 vs. peers), we also believe there is room for additional rerating as the company continues to deliver.
Indra Sistemas is engaged in the design, development, manufacture, assembly, repair, and installation of computer software and applications. Through its subsidiaries, Co. is engaged in consulting, graphic design and multimedia, web design and marketing, internet development and electronic trade, systems integration and hosting geared business to business and business to consumer, as well as in internet financing and electronic marketing. Co. serves defense and security, transport and traffic, energy and industry, telecom and media, finance and insurance, and public administration and healthcare markets. Co. operates primarily in Europe, the United States, Canada, and Latin America.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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