Bankinter | We maintain the Neutral recommendation. Our valuation for the Spanish stock index points to 10,005 points, which represents a potential of 4.6% as of Dec-20 and an estimated dividend yield for the 4.5% index, the highest among the indexes analyzed.
The target price increases slightly compared to the previous quarter (+ 2.8%), which already considered a time horizon Dec-20. Our valuation assumes an Implicit Percentage of 13.6x 2020e compared to a historical average of 17.3x and 13.8x in 2018.
The most relevant variations in the hypotheses since our last review:
(i) The BPA estimated by consensus raises an increase of + 8.3% 2020E, from + 3% expected for the whole of 2019E. Both were revised down -5.2% and -3.8% 2019 and 2020 respectively since our last valuation.
(ii) The 10-year bond has rebounded by 20bp .;
but (iii) we have revised the risk premium down 70bp, given the lower risks of a slowdown in the European economy and a better US-China trade tone.
(iv) The Bottom Up of our valuations of the index firms improves 2.5% in the period (up to 10,406 points, on which we apply the same 5% discount in the central scenario as in Top Down).
