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IBERIAN DAILY 19 JANUARY + 4Q’21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: MELIÁ HOTELS, PROSEGUR, REPSOL.

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

The Ibex holds up better thanks to its value character
Rising sovereign bond yields once again took their toll on indices on both sides of the Atlantic. Thus, within the Euro STOXX, only Energy (after a new rise in the price of crude oil) and Telecoms posted gains, vs. the bigger drops in Media and Technology. On the macro side, in Germany, January’s ZEW index improved more than expected, hinting at an IFO index increasing to levels of 98. In the US, January’s Empire index contracted more than expected, returning to negative territory, whereas the NAHB housing market index fell unexpectedly. On the geopolitical front, the tension between Russia and Ukraine increases and European diplomats warn that Europe is closer to a war since the separation of the former Yugoslavia. Meanwhile, the green party of the German administration support the US idea of permanently blocking Nord Stream 2 gas pipeline. In US business results, Bank of New York and Goldman Sachs released disappointing earnings and warned about cost inflation on wage pressure.
What we expect for today
European stock markets would open with drops of around -1.0% with a similar performance of the different types of sectors. Currently, S&P futures are down -0.58% (the S&P 500 ended -0.37% lower vs. the European closing bell). Volatility in the US rose (VIX 22.79). Asian markets are sliding (China’s CSI 300 -1% and Japan’s Nikkei -2.8%).
Today we will learn in the UK and Germany December’s inflation, and in the US December’s housing starts and and building permits. In US business results, Citrix, Procter&Gamble, US Bancorp, Bank of America and Morgan Stanley, among others, will release their earnings. In debt auctions: Portugal (€ 1.25 Bn in 6M & 12M T-bills) and Spain (€ 5 Bn in bonds due 2027, 2030 and 2040).

COMPANY NEWS

REPSOL. With the trading statement we expect solid 4Q’21 results. BUY
The 4Q’21 trading statement does not show any surprises in crude oil prices (+8.6% vs. 3Q’21 to US$ 79.80/barrel), while production rose +5.8% vs. 3Q’21 to 561 kboe, with the annual average standing at 572 kboe (-1% vs. guidance’21 and -2% below our estimate). The refining margin rose to US$ 4.40 (vs. US$ 3.20 in 3Q’21), with the annual average coming in at US$ 2.40 (vs. guidance and our estimate of US$ 2). The company will release its 4Q’21 results on 17/02, and following this trading statement we raise our 4Q’21e Net Profit estimate +62% to € 769 M (in line with the consensus), leaving our Net Profit’21e estimate at €~2.35 Bn (around +18% above the previous estimate, +145% vs. 2020 and in line with the consensus). This rise would not mean a significant impact on our T.P., which would remain at € 13.25/sh. (+19% upside).