Although the week started with slight declines in stocks, the Ibex 35 is flirting with the 12,000 point barrier, which is the highest level since 2010. An annual revaluation of almost 18%, the highest among main continental references, leaves the Spanish index at this level, but the experts who monitor its behavior are even more optimistic and They value the reference at nearly 13,000 points, which represents the highest price target in 13 years and a potential 9% upside from current levels.
The expert consensus that brings together Bloomberg sees the Spanish index at 12,997 points in the next 12 months, more than 12% higher than the valuation with which the year began, at 11,581 points. And, despite the fact that the strength of the reference has been evident since the beginning of the year, the third quarter – which ended yesterday to give way to the last quarter – has fattened further widens the performance gap between the Ibex 35 and its counterparts. The Spanish stock recorded an increase of 9% over these three months, four times that of the EuroStoxx 50, with 2%.
The Spaniard has also gained confidence in recent months compared to the main Wall Street benchmarks, with a 5% revaluation for the S&P. However, 87% of experts consulted in this way believe that the ibex will exceed or maintain current levels at the end of the year.
Also a quarter from the end, the profitability of the Spanish index triples its annual average since its creation in 1992, which is 6.6%. The earnings season for the third quarter of the year, which begins in mid-October for the Ibex, will also set the tone for the latter part of the year. In fact, it was the better-than-expected results of certain companies that propelled the Ibex to levels not seen since 2010, with a special mention for the banking sector. In 2010, stock markets were particularly penalized when they factored in the possible breakup of the euro.
In a context of falling rates like the current one, with two cuts of 25 basis points by the ECB and another of up to 50 basis points by the US Federal Reserve, the market expected that bank yields would are affected. Something which would have a strong impact on the ibex, given its high banking. However, not only have the entities held up well, they are among the most bullish companies in the selective sector so far this year, thanks to results that beat expectations and sharply raised 2024 profit forecasts.
Another of heavy goods vehicles like Inditex, which has revalidated its historical highs on different days, has also increased the price of the ibex, since the Galician textile company strongly moves the price of the Spanish market, with a capitalization that already reaches 160 billion, the highest from a Spanish market. listed company throughout stock market history.
“Three factors should be united so that the selective maintains its vigor until the end of the year. The first, that it continues to accompany the international stock market environment. The indices can evolve individually better or worse than ‘others, but there is a general market trend that must The second is that the most weighted securities in the Spanish stock market continue to perform well Everyone knows that the Ibex 35 is a heavily banked index, and. this characteristic usually marks it for the worse, but it also does it for the good, as it does,” says iBroker analyst Antonio Castelo.
“Even if it may seem contradictory, banks could benefit from lower rate movements, because even if a drop in rates would lead to a narrowing of their margins, These entities could also see their business volume increase benefiting businesses and individuals from the possibility of obtaining cheaper financing,” continues Castelo.
Gustavo Martínez, professor of Finance at the Francisco Marroquín University and market analyst, points out in the same sense that the good performance of some of the main members, such as Inditex, raises the Spanish selection to 12,000 points, the highest level of recent years. . “To this must be added an environment of lax monetary policies and lower interest rates from the European Central Bank which favor sectors such as energy with a significant weight within the index, and improve the ratios of solvency of the financial sector with stocks such as BBVA and Banco Santander leading the index Very positive sentiments are also coming from China for the Spanish index after the Asian giant announced the largest liquidity injection in its history. “, he adds.
Nearly 80% of Ibex companies see their valuation increase
All the banks in the Ibex 35 are among the companies whose valuation has improved since January 1. 27 of the 35 companies noted an increase in this direction, with Rovi in the lead, with a 54% increase in its price target compared to what the consensus estimated in January. From now on, the experts collected by FactSet see the shares of the pharmaceutical group at 62 euros.
Indra is the second with the largest increase in its valuation, with almost 43% more, followed by Banco Sabadell, with 36.5%. The Catalan bank is also the most optimistic of the year, with a revaluation of 66%, after the sharp rise its shares experienced after learning of BBVA’s intention to take over the entity. Within the index, Up to 10 companies see target price increases of more than 20% since the start of the course. Energy companies are on the other side of the picture, with Solaria, Acciona Energía, Repsol, Endesa and Enagás among the few companies in the index whose valuation has declined.
