''Better, guidance upgraded'' These have been the lines we have heard the most from Spanish Mid Caps over the H1 21 results season. Notably, autos and capital goods names are recovering from their slump. But for sectors like food (comps v last year) or security (recovery not evident yet) it''s proving tougher. Still, more than 40% of the companies under our coverage released positive surprises. Sales are c.3% below the peak in 2019 but this is mainly due to negative FX impact. Excluding FX, sales would have been closer to or above 2019. Margins continue to improve. EBITDA margin LTM reached 15.0% already above Q3 19 peaks. Plenty of guidance upgrades In H1 we have seen one of the highest number of guidance upgrades in recent years. Almirall, Applus, CIE Automotive, Fluidra (twice), Gestamp, Logista (twice) and Rovi have upgraded their FY21 targets. Among the rest, there are companies which have not say anything (some of them with no guidance) and some are quite comfortable to beat expectations without upgrading numbers: CAF, Indra, Vidrala or Viscofan. Spanish Mid Caps underperforming Europe Despite the good trend at the beginning of the year, with Spanish names catching up with European peers, in the last 3M, it has reversed into underperformance with Spanish SMC names flat (-1%) but -6% vs European peers. We reiterate our top picks: Applus, CAF, Gestamp and Logista In the last 3 months we initiated Sponsored Research coverage on Ence and Edreams and we have downgraded Tecnicas Reunidas to Neutral. Our four top picks remain unchanged: Applus (we see a visible recovery and a CMD as a catalyst in H2 21), CAF (strong backlog execution with growing margin, and trading at cheap multiples), Gestamp (outgrowing the market and very likely to beat guidance after upgrading it in FCF) and Logista (still delivering growth, looking for an acquisition and trading at 8% FCF yield).