Monday, August 8

Banco Santander, Iberdrola: the IBEX majors fall behind the tail of Europe in earnings per share

The companies of the IBEX 35 with presence in the Eurostoxx 50 they fell back to the worst positions in earnings per share (EPS) within this selective.

Santander Bank it is placed as the seventh most lagging within the main indicator of the euro area with an EPS of 0.32 euros and the other Spanish banking component in the Eurostoxx 50, the BBVA, ranks tenth with 0.64 euros.

Banco Santander and BBVA, among the cheapest

Instead, both entities are included among the cheapest of the Eurostoxx 50 for the next course based on the profit-ratio, known as PER.

Banco Santander is the sixth value of this indicator with the lowest PER, 7.79 times, and BBVA is the tenth, 9.42 times. If the stock is cheap, it usually also offers attractive potential.

The group of Cantabrian origin has a potential greater than 25 percent and that of BBVA exceeds 20 percent.

The experts thus value the results and objectives presented by both entities. Banco Santander is in a position to beat its profitability target based on the 10 percent ROTE and experts see the value at the 2019 highs, at 3.86 euros.

For its part, BBVA settled its offer on Guarantee and the Investor Day, where it announced a ROTE for 2024 of 14 percent, with the consensus renewing its optimism about the bank led by Carlos Torres Vila.

Iberdrola seeks 1 billion profit this quarter

The BPA of Iberdrola is 0.52 euros per share, the ninth lowest in the EuroStoxx 50.

The company is immersed in finding the formula to comply with the guidelines announced to the market despite the pay cuts in Spain and the United Kingdom, to which is added the rise in gas prices.

The power company reiterated in the last presentation of results the objective of closing 2021 with a profit of between 3,700 and 3,800 million euros.

The 10 percent drop in earnings until September in the interannual rate, forces the José Ignacio Sánchez Galán to close the fourth quarter of the year with a profit of more than 1,000 million.

Experts trust Iberdrola’s ability to achieve this and therefore urge investors to take positions in the stock. The market consensus compiled by Bloomberg does not reflect any “sell” recommendations and the majority are “buy” at 61.8 percent.

The new restrictions due to Covid-19 put pressure on Inditex

Inditex it closes the Spanish presence on the Eurostoxx 50 and is placed with an EPS of 0.83 euros, just behind BBVA. At the business level, the world’s largest retail giant has already erased the coronavirus from its accounts with sales at pre-pandemic levels.

Experts believe that the titles of the group chaired by Pablo Isla they must collect this situation and estimate that the stock has the capacity to exceed its historical maximums. That is, to sustain the price above 100,000 million euros of market capitalization.

Inditex’s long-term visibility is clear after overcoming supply problems thanks to the diversification of its manufacturing centers and the greatest tensions are in the short term.

The upsurge in coronavirus cases that has led Austria to a population lockdown could also occur in Germany. These measures imply the closure of non-essential businesses, such as clothing stores.

The high presence of Inditex brands throughout Europe means that sales may suffer in the final stretch of the year. Therefore, investors undid positions in the value after learning about the new restrictive measures in northern Europe.