Companies

Repsol

Repsol production falls 3.2% in Q2’22 (540.000 b/d); but refining margins continue recovery

Renta 4 | On Thursday after the market’s close, Repsol published operating figures for Q2’22, during which the price of Brent (113,9 USD/b) rose 65.1% year-on-year and 11.4% quarter-on-quarter. Meanwhile the price of gas (7,2 USD/Mbtu) was up 157.1% year-on-year and 44% quarter-on-quarter. We recall that in its guidelines for 2022, the Spanish oil and gas group considers levels of 70 USD/b and 3,7 USD/Mtbu, and that the sensitivity to…


Madrid Bourse

The Ibex Medium Caps is coping better with the pressure in Q2’22

Renta 4 | During Q2’22 the stock market indices have had to deal with the consequences of the war in Ukraine, the environment of high inflation, the uptick in IRRs and downward revisions to economic growth. In this context, the IBEX Medium Cap (-1.5% in Q2’22) has offered a relatively better performance out of the three benchmark indices (-4.1% of the IBEX-35 and -6.1% of IBEX Small Caps). Our Selection…


Stainless steel

We still prefer carbon steel vs stainless steel; ArcelorMittal (Overweight) and Acerinox (Equalweight)

Morgan Stanley | The steel companies have historically done badly in recessions. Currently, with the risks of recession on the rise, margins at spot price continue to weaken and we have seen an important derating. It is likely that delays in prices support Q2 profits, but we see a significant slowdown from the next quarter. We still prefer carbon steel to stainless steel. ArcelorMittal (OW): we expect the company to generate…


Cellnex

Deutsche Telekom’s decision on the sale of its towers could be revealed this week

Renta 4 | According to Bloomberg, the consortium formed by KKR, GIP and Stonepeak would be tabling a more attractive offer for Deutsche Telekom’s towers than that presented by Cellnex and Brookfield. The possibility that Vodafone, via its affiliate Vantage, and even American Tower, have already withdrawn from the process, also appears to be ruled out. The news report says that Deutsche Telekom’s decision could be revealed before the end…


Acciona

Acciona wins contract to build a 15km ring road in Australia with an overall budget of around €700 M

Intermoney | Acciona (Buy, Target Price 210 euros/share) continues to grow in the public works sector in Australia. It has been chosen as one of the contractors to build a 15km ring road in Queensland. The overall budget for the project is around 1 billion Australian dollars (some 700 million euros). Along with a local firm, Acciona has won, provisionally, one of the lots awarded with a investment budget of…


BBVA

BBVA, top pick in Spanish banking sector for the quarter on possible hike in Mexico guidance

Morgan Stanley | A more positive tone or guidance concerning NII should continue providing support for the Spanish banks. We recall that last week we raised our estimates for NII by an average 5% after incorporating 100 bp of rate hikes vs a previous 50 bp. This should offset the impact of an average 15 bp in CET1 due to the rise in bond yields. Asset quality should remain stable. BBVA…


Repsol

Germany, Canada negotiate investing €2 B in Repsol’s Saint John LNG plant

Renta 4 | Germany and Canada are negotiating an investment of 2 billion euros in the Saint John LNG regasification plant, owned by Repsol. The aim is to be able to export gas to Europe to reduce dependence on Russia, according to press reports. The Canadian Environment Minister has indicated that Repsol’s plant would be the one which could most quickly make the deployment, as it already has the infrastructure…


Repsol

Repsol and Ardian bid for majority stake in PLT Energía

Renta 4 | Repsol would be interested in buying Italian renewables company PLT Energía. Repsol and the French fund Ardian are bidding for a majority stake in the Italian firm valued at 1 billion euros, according to press reports. In the event the possible purchase happens at some point in the future, it would mean Repsol disembarking in the Italian energy market. Swedish fund EQT would also be interested in…


Iberdrola

Iberdrola commits to maintaining its €3.5 B investment in the UK despite new regulatory framework

Link Securities | Iberdrola has committed to maintaining its planned 3 billion pounds (some 3.5 billion euros) investment in the UK. This is despite the new regulatory framework proposed for network operators in the country which limits profits, according to a report in Expansion. The Spanish electricity company explained on Thursday that it plans to continue to drive energy transformation in the UK as part of its transition towards an…


Ferrovial-Toronto

Exposure to the US, sensitivity to inflation and protection against the upticks in IRRs:Overweight Ferrovial (T.P. 34 eur/share)

Morgan Stanley | After it being the principal motive for criticism from investors, the recent recovery in traffic on the 407-ETR (-19% vs 2019 en Q2’22; -34% vs 2019 in Q1’22) is driving Ferrovial’s momentum in the short-term. And it also provides support for a return to dividend payments mid-July 2022. In Heathrow, increased traffic, more inflation-linked in the short-term and lower CAPEX more than offset cost expectations. Meanwhile, in the…