With the economic cooling target achieved, central banks in Europe and the United States are entering a new phase of interest rate cuts. With inflation falling, macroeconomic data dominate investors’ forecasts. And in a rate cut scenario, Lower financial costs will impact company valuationsDespite the doubts raised by Germany’s anaemic growth and France’s governability, apart from the upcoming elections in the United States, where despite the divergences between Democrats and Republicans on certain issues such as taxation, the two parties are similar in increasing debt and the public deficit.
Reasons that lead the securities agency Finaccess Value to recommend caution and selectivity in the choice of securities, even if, as Lola Jaquotot, variable income manager of the company, pointed out in the presentation of the outlook, “as long as corporate profits do not collapse, the markets will resist.”
It is true that North American companies are maintaining resilient profit growth, while Europe is where the greatest disparity between sectors is seen, with Carmakers and luxury goods companies decline as China slowsand the impact of the drop in crude oil on energy companies. At Finaccess Value, they acknowledge having unwound positions in Mercedes and Stellantis.
“We expect the price of electric cars to fall, but companies have enough liquidity, because they have benefited in those years from the rates through their financial companies. But we can see surprises, even if we should have already seen their lowest level in the stock market, depending on each company,” Jaquotot said.
The securities agency finds the investment in Repsol attractive due to a valuation problem. “We believe that the worst-case scenario regarding the price of oil is already integrated into the prices and we will have to be attentive to the movements of OPEC at its December meeting, which could serve as a catalyst,” they warn.
At Elecnor, a target price is estimated at 20 euros per share, in a company that has net cash of just over a billion euros, while at Allfunds, they hope that doubts about possible corporate operations will be dispelled. At Cellnex, they recall that it is trading with an EV/Ebitda discount of 15% compared to its average of the last five years.
