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IBERIAN DAILY 24 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: NEINOR HOMES, OHLA, SOLARIA.

IBEX on the cusp of 11,800 points
The session in Europe was driven in part by the positive opening in the US, which continues its record trend and seeks to hit a new record high. In the STOXX 600, and after strong sector rotation during the session, Autos and Retail rose the most, with Pharma and Banks being the worst relative performers. On the macro side, in Spain the Govt. will raise GDP’24 growth to 2.7% from the previous 2.4%, in line with the 2.8% expected by the BoS. In the euro zone, both the Services and Manufacturing PMIs (27 straight months below 50) fell more than expected, due mainly to Germany (where the manufacturing sector continues to worsen) and France (where optimism from the Olympics has reversed). In the UK both PMIs fell more than expected as well, but remaining in expansion numbers and showing 0.4% QoQ growth. In the US September’s PMIs had a mixed reading, where Services fell less than expected but Manufacturing fell unexpectedly for the third straight month (3 months below 50). August’s Chicago Fed index rose unexpectedly. In Mexico, July’s IGAE activity index rose more than expected. In China, the PBoC announced a series of measures to stimulate the economy, among which are reducing the reserve ratio by almost -100bps through the end of the year, cutting the 7D repo rate by -20bps to 1.5%, lowering the mortgage rate by -50bps, lowering the initial payment for home buyers at 15% from the previous 25% and allowing funds and brokers to access PBoC funds to buy shares. All these measures in total could mean more than US$ 200 Bn (~2.0% of GDP).
What we expect for today
Stock markets would open with gains of between +0.5% and +1.0%, led by Consumer Good and Basic Resources after the measures announced in China. Currently, S&P futures are flat (the S&P 500 ended +0.13% higher vs. the European closing bell). Asian markets are rising (China’s CSI +3.55% and Japan’s Nikkei +1.02%).
Today in Germany we will learn September’s IFO and in the US September’s consumer confidence and July’s housing prices.


COMPANY NEWS

SOLARIA. 2Q'24 Results preview. OVERWEIGHT
SLR will release its 2Q’24 results on 30 September (with a conference call at 18:00 CET). We do not expect any new MW to be connected in 2Q’24 BS(e) and we expect revenues to reach €~45 M (-18% vs. 2Q’23), affected mainly by the plunging pool prices, which will be partly offset by the higher capacity in operation and by other revenues. EBITDA will fall around -18% (€~39 M), with the margin remaining at ~89%. Average pool prices have fallen -25% vs. 1Q’24, and this will not be offset by the increased MW installed over the past year. Longer-term, pool prices show recovery with forward prices rising around +33% for 2025-26 from 2024 lows.