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IBERIAN DAILY 16 FEBRUARY + 4Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: NEINOR HOMES, RESULTS HIGHLIGHTS.

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’20 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Reflation expectations continue to fuel stock markets
Global stock markets continued to climb with the eyes set on the deployment of vaccines. The rally in crude oil peixwa (Brent crude +1.5%) helped to underpin the widening in sovereign debt yields, benefiting value. In the Euro STOXX, Media (Vivendi), Banks and Energy saw the biggest gains vs. Industrials and Utilities that ended practically flat. On the macroeconomic level, in Spain we saw the weakness in the real estate sector where home purchases dropped by -17.7% in 2020 to 2016 levels. The Eurogroup meeting discussed the increase in insolvency risks and the guidelines to reinstate fiscal rules. In the UK it is estimated that taxes should be raised by £ 60 Bn to balance post-pandemic accounts.
What we expect for today
The European indices would see gains higher than +0.2%. Currently, S&P futures are up +0.6% (the S&P 500 was closed for the holiday). Volatility in the US will start from 19.97 (VIX). Asian markets are rising (CSI 300 closed, Japan +1.3%).
Today in the Euro zone, we will learn the 4Q’20 GDP, in Germany February’s ZEW, and in the US February’s manufacturing Empire index. In debt auctions, Spain will issue € 3 Bn in 3M & 9M T-bills. In US business results, Zoetis, Devon Energy and Allegion, among others, will release their earnings.


COMPANY NEWS

4Q’20 Results highlights and rest of previews.
Among the companies releasing their earnings next week, on the negative side, we stress Meliá (release date 25/02), where we expect poor 4Q’20 results on a standalone basis given the lack of activity and an unfavourable outlook to be unveiled in the short-term. Our estimates already assume a strong recovery (EBITDA’23 above 2019 levels) that is apparently more and more optimistic, which these results could underscore, giving rise to new estimates cuts and hitting a share price that has climbed +97% since November (+69% vs. IBEX).