With the Ibex 35 as the most bullish index of the year on the Old Continent (a little more than 1% of its annual trading peak) and with some of its heavy goods vehicles at historic highs or on the verge of reaching them, there are still attractive opportunities within the selective. The ten largest companies by market value of the Spanish benchmark They offer an average discount of almost 30% compared to their respective multipliers from the last decade. In other words, these companies remain cheap when considering the P/E ratio, which is the number of times earnings are included in the stock price.
This discount becomes even more striking with the strong revaluations many of them have reaped so far this year, with companies like Inditex at record trading levels (it’s the third most bullish company on the Ibex 35, with an increase of more than 36% ) and others, such as banking entities, with increases of more than 20% in this interval in most cases.
The Ibex 35 gains 17% in 2024, but its earnings estimate is also growing at a good pace and its multiplier, 11.8 times for this year, continues to be lower than its respective historical averages. Two and a half months after completing this course, the investor already has his sights set on profits for 2025. And if we take this multiplier into account, The discount offered by the Spanish index is even greater, with a PER of 11.1 times, as estimated by the consensus of experts collected Bloomberg (see graph).
This drop in price compared to the average of the decade and the last 20 years doubles the discount offered by the Stoxx 600, the main benchmark of the Old Continent, which trades at a multiplier of 13.7 times by 2025. The discount of the European index compared to its decade average is 18.9%, compared to 46.9 % for the Ibex 35, as well as a reduction of 16.4% over the last two decades, compared to 33% in Spain. Even if the Stoxx 600 continues to offer a discount compared to its averages, the EuroStoxx, which brings together the 50 most representative companies in the euro zone, no longer offers a price reduction compared to the decade’s average.
Continuing at the pace of 2024, profits will continue to grow in 2025 within the Ibex 35, according to FactSet data, but this increase will not be as powerful as that of the rest of the European or American markets, where according to these Estimates of increases of up to 14% will be observed. % of profits in 2025 in cases like the S&P 500. Expert consensus expects the Ibex to reach an EPS (earnings per share) of 1,028 euros, compared to 989.6 euros in 2024 (3.9 ). % more) . For values, net profit increases will be greater at Grifols, Acerinox, Fluidra, ArcelorMittal and Rovi, with increases of more than 20% in all cases and up to 61% in the pharmaceutical sector.
By values
That Inditex offers almost 7% discount compared to the average of its last decade is accompanied by intense growth in estimated profits. The share of the Galician textile company has already reached the historic level of 53 euros, which means that it is trading at levels that it has not previously reached in its 23 years of stock market existence . The share price even exceeds the expert consensus valuation, with an average price target of 50.49 euros, although some companies already see Zara’s parent company above 55 euros and even in the 60s , like the case of DZ Bank, which gives you the highest fair price.
Iberdrola, which is the second largest capitalization index in the Ibex 35, is trading just over 1% off the all-time highs reached on October 1. Its discount is the lowest among the ten largest ibexes which offer a multiplier (almost 2%), since the tenth place in market value is currently occupied by Cellnex, but it does not offer a PER because it will not generate profits in 2024. The company chaired by Ignacio Galán, according to the latest Renta 4 report, has an excellent positioning and a solid balance sheet to continue its growth. “The strong growth forecast (2024-2026 investments of 37 billion euros), as well as the dividend policy (payment 65%-75%) will be supported by: its capacity to generate cash, its partnership (entry of financial partners through minority stakes that contribute to the volume of investment in renewable assets under development and, finally, the asset rotation strategy (sales cycles in Mexico)”, describes the firm.
The banking entities (Santander, BBVA and CaixaBank) continue to appear on this list as second in terms of capitalization and are also among those that offer a greater discount compared to their respective historical averages. All three propose a multiplier of less than 10 times by 2025, representing a discount of around 40% to their decade averages. In this specific case, the consensus of experts does not expect banking entities to exceed the record profits of 2024 in 2025, with the exception of Banco Santander, for which a slight increase of almost 1% is estimated for next year. Thus, the entities’ multipliers remain quite attractive, since the expected profits for the sector continue to be at levels rarely achieved before.
Telefónica and Aena are also less than 1% away from reaching stock market highs again (historical in the case of the tourism company and 2022 in that of the telecommunications company). Its multipliers, like those of the rest of the companies that complete this list (Amadeus, Ferrovial and Naturgy), exceed 10 times, which is the threshold usually set to assess whether a company’s share price is undervalued. However, in all cases except Naturgy, Reductions from their own averages for the decade exceed 20%.
Other indices at the highest
The celebration of top prices is not exclusive to the Ibex 35, which is about to reach its annual peak. In fact, other selectives go further and celebrate their historic peak. Monday, The German Dax managed to record a new all-time price record. Over the year, it increased by 16% on the stock market. The EuroStoxx is also just over 1% away from a new annual high (which it reached in May), which would leave it at 2001 levels. The Stoxx 600 is even closer, since it is separated with a little more than half about to be. surpass, in its case, the historic peaks it reached at the end of September.
This joy of investing on Monday is in tune, as usual, with Wall Street. The S&P 500 is another selective which is revalidating new highs on the stock market (it increases by almost 23% over the year) while waiting for large companies like Goldman Sachs or Netflix, among others, to publish their report for the fourth quarter this week. . S&P 500 companies will report their weakest results in four quarters, up 4.3% from a year ago, data from Bloomberg Intelligence.
