EUR 100.00 For Business Accounts Only

IBERIAN DAILY 10 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: REPSOL.

Transitional session
Except for the IBEX, which closed flat, European stock markets posted moderate gains in another session with hardly any macro references and with no news from the Middle East. Thus, in the STOXX 600, only Energy closed with losses, compared to the biggest gains in Technology and Autos. In the US, the minutes from the Fed’s latest meeting show significant lack of agreement on cutting rates -50bps and cuts of the same magnitude will be complicated in the future. In Mexico, September’s inflation fell slightly more than expected and in Brazil it rose slightly more than forecast.
What we expect for today
Stock markets would open with a slightly bearish slant awaiting US inflation data. Currently, S&P futures are down -0.04% (the S&P 500 ended flat vs. the European closing bell). Asian markets are rising (China’s CSI 300 +2.64%, Japan’s Nikkei +0.32%).
Today in the US we will learn September’s inflation and weekly jobless claims and in Brazil August’s retail sales. In US business results, today Domino’s and Delta Airlines will release their earnings.


COMPANY NEWS

REPSOL. Poor 3Q’24 trading statement due to the refining margin and production levels. We lower our T.P. and maintain our OVERWEIGHT recommendation.
Production fell due to the stoppages in Libya (down to 553 kboe/d vs. 589 kboe in 2Q’24 and the guidance of 590-600 kboe), and the refining margin fell to US$ 4/barrel (from the previous US$ 6.30 and vs. the guidance of US$ 8.00). The price of Brent also fell (-5.5% vs. 2Q’24 to US$ 80.30 vs. the guidance of US$ 80/barrel), although the Henry Hub gas price improved to US$ 2.20/MBtu (from US$ 1.90 and vs. the guidance of US$ 2.40). In the 3Q’24 results (to be released on 31/10) we expect €~550 M of adjusted Net Profit in 3Q’24e (-37% vs. 2Q’24), which would be around -7% below the consensus (despite the almost -23% cut since August). After lowering our estimates for the refining margin and the price of Brent for 2024-27e and rolling over our model, we cut our T.P. around -7% to € 16.90/sh. But maintain our OVERWEIGHT recommendation. Today we would expect a negative reaction to this trading statement.