Buy/TP:€25.80/CP:€21.87
Spanish retail sales fell 0.4% nominal/rose 0.4% constant rices in August, seasonal and calendar adjusted, INE data show. This compares with -1.0%/-0.5% respectively in July (YTD average +0.2%/+0.2% vs. July's +0.2%/+0.1%). Excluding service stations, sales fell 0.8% nominal/0.3% constant (vs. July's -0.8%/-0.5%). Within this, food sales fell 0.6% nominal and grew 1% constant (-0.9% and +1% July) taking food YTD growth to 0.2% and 0.4%, vs. 0.3% and 0.3% in July.
Non-food sales were flat nominal/+0.7% constant (down 0.9%/ 0.5% July). Apparel outperformed at +1.8% nominal/+1.9% constant (July +0.3%/+0.5%). In contrast, Home decreased 0.6% current/0.1% constant (July -0.4%/+0.2%), while "Other" (including expenses such as utility bills) fell 0.8% nominal (-0.1% constant). By distribution class, large chain store sales increased 0.4% nominal/0.9% actual, suggesting a reversal of the previous two months' underperformance (July -2.1%/-1.6%), perhaps thanks to the end of more intense promotional activity at the smaller chain stores and independents over the summer sales period (rebajas).
In terms of the read-across to Inditex, ITX's current trading update (1 Aug to 12 Sept), at its 1H14 results on 17 Sept, showed constant currency sales up 10% (SANe 3.5% LfL vs 4.5% 1H14). We note this period extends beyond the INE data, which is, therefore, somewhat backward looking. That said, incorporated within the +10% CC growth, we estimate that the 1H14 Spain strength (6% LfL) continued, albeit at a slightly more moderate pace given the tougher comp. More broadly, at group level we expect a stronger-than-average August and a slightly weaker-than-average first two weeks of September, as has been the case in many apparel markets, given the warm weather. We note that Inditex's comps ease significantly in the second half of 3Q.
Although there is nothing particularly new to take from this INE update, the continued momentum in Spanish retail sales is encouraging and contributes to our constructive view on ITX (Buy TP EUR25.80/share).
- Ophir down as much 3% after cut to underperform vs buy; PT cut 16% to 240p
- Says Tullow, Enquest both making progress towards positive FCF over next 18 months; notes shares at 6, 2-year lows, respectively
- Sees Ophir as overleveraged to “fickle” farm-down market as it undergoes strategy shift
- DNO, Dragon top picks on cash flow, growth
- Sees DNO as discounted vs pre-Islamic State levels as Tawke ramps up; main catalysts after Western campaign against extremists to be cash receipts for exported crude, alternative marketing arrangements
- Dragon’s $1.9b cash pile offers scope for cash returns; likely to complete 10-12 wells in 2H, will be drilling in more productive part of reservoir
- EnQuest (PT cut 7% to 140p) trading at discount due to disappointment over Alma-Galia startup delay, risk on Scotland vote; both risks subsided, factored in with shares at 50% to European E&P peers on 2015 ests. for P/E
- BofAML says farm outs not generating shareholder value currently; of 5 “sizeable” farm outs in past 2 years, average share price drop has been 7% over subsequent 3 months, citing Salamander (Thailand), Ophir (Tanzania), Rockhopper (Falklands), Petroceltic (Algeria), Heritage Oil (Iraq) deals
2014-09-29 06:32:37.866 GMT
By Alessandra Migliaccio
Sept. 29 (Bloomberg) -- The Italian govt may put off the
sale of a stake in Eni, Corriere della Sera reports without
saying where it got the information.
* The govt will likely go ahead with the sale of ~5% of Enel
by 2015: Corriere
* State may also sell a stake in railways Ferrovie dello
Stato: Corriere
* Italy May Sell $7 Billion in Eni, Enel Stakes to Cut Debt
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To contact the reporter on this story:
Alessandra Migliaccio in Rome at +39-06-4520-6324 or
amigliaccio@bloomberg.net
To contact the editor responsible for this story:
Jerrold Colten at +39-02-8064-4261 or
jcolten@bloomberg.net