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IBERIAN DAILY 04 FEBRUARY + 4Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: UNICAJA.

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.

Extreme volatility on stock markets
Following a negative opening bell, European stock markets recovered ground after the announcement of a one-month postponement in the tariffs imposed to Mexico and Canada (in exchange for concessions in borders and fight against drug trafficking), but sliding >-1.0%. Thus, in the STOXX 600, most sectors (16/20) ended with drops, led by Autos and Banks vs. Household and Media that saw the biggest gains. On the macro side, in the euro zone, January’s inflation rose more than expected to 2.5% YoY (above 2% for the third consecutive month), with the core data remaining at 2.7%. January’s final manufacturing PMI was raised to 8-month highs. In France, the PM F. Bayrou approved 2025 budgets using the controversial 49.3 article of the Constitution that would open the door to a vote of no confidence by the party France Unbowed (LFI). In the US, the manufacturing ISM recovered unexpectedly to levels consistent with expansion (>50) to September’22 highs. In China, the government announced it will start to impose 10%-15% tariffs from the 10th of February on US products such as liquefied natural gas, crude oil and farm equipment although the press outlines that D. Trump could negotiate the implementation of tariffs on the country over the coming days. In US business results, Tyson Foods and Palantir beat expectations.
What we expect for today
Stock markets would open with slight drops, despite the positive session in China. Currently, S&P futures are down -0.22% (the S&P 500 ended +0.04% higher vs. the European closing bell). Asian markets are rising (China’s CSI 300 closed and Japan’s Nikkei +0.67%).
Today in the US we will learn factory orders and JOLTS job openings and in Brazil the BCB minutes. In US business results, Paypal, Pepsico, Pfizer, Merk & Co and Estee Lauder, among others, will release their earnings.


COMPANY NEWS

UNICAJA. Better 4Q’24 results in revenues and new 2025-2027 strategic plan. UNDERWEIGHT.
The 4Q’24 results beat expectations in NII (-0.7% vs. 3Q’24; +4% vs. consensus) and were slightly better in fee revenues (-1% vs. 4Q’23; +2% vs. consensus), marred by higher generic provisions (€ -96 M; 3x expectations) due to one-off impairments that mean Net Profit is around -13% vs. consensus. On the consolidated level, revenues grew +18% vs. 4Q’23 (+4% vs. expected), costs +6.4% (vs. +5% consensus) and Operating Profit +29% (+9% vs. expectations). 15.1% CET1 (-30bps in 4Q’24 due to market valuation adjustments). The bank has announced the targets of its new plan, foreseeing >€ 500 M of Net Profit/annually over 2025-27, distributing at least 85% of the accumulative Net Profit with an ordinary 60% payout and an additional 25% payout (through buyback or dividends) in 2026-2027, keeping CET1>14%. Mixed earnings performance although with a surprise in the targets set out in the plan. We expect a positive market reaction with the messages to be conveyed in the conference call being key.