marchmeena29
JPMorgan analysts believe that companies that are cash rich, or that benefit from still high interest rates, will be well positioned to outperform through the first half of the year.
In an equity strategy report, published on Monday, analysts outlined 27 European stocks from the STOXX Europe 600 Index (STOXX) that benefit from interest rates levels that continue to stay high.
This basket, analysts wrote, is outperforming the STOXX 600 (STOXX) by 14% since the start of 2024. They believe this trend will continue “at least in the first half of this year.”
In contrast, stocks with high refinancing needs are losing 20%, compared to the STOXX 600 (STOXX) over a year ago.
“Many corporates benefitted…as interest rates increased more than 300 basis points, the net interest expense came down,” JPM analysts said. “That could be explained by companies locking in low cost of financing through extending the duration of their debt, and also through many corporates seeing an improving return on their cash balances. This, rather counter-intuitive, development is set to normalize as time passes. Companies will have to roll their debt into higher cost of credit.”
These are 27 European beneficiaries of higher rates:
- Publicis Groupe S.A. (OTCQX:PUBGY)
- Renault S.A. (OTCPK:RNSDF)
- Mercedes-Benz Group AG (OTCPK:MBGAF)
- Stellantis N.V. (STLA)
- Industria de Diseno Textil S.A. (OTCPK:IDEXY)
- Whitbread Plc (OTCPK:WTBCF)
- Volkswagen A.G. (OTCPK:VWAGY)
- Beiersdorf Aktiengesellschaft (OTCPK:BDRFF)
- KONE Oyj (OTCPK:KNYJF)
- Banco BPM S.p.A. (OTCPK:BNCZF)
- Banco Bilbao Vizcaya Argentaria (BBVA)
- Bank of Ireland Group Plc (OTCPK:BKRIF)
- Bankinter S.A. (OTCPK:BKIMF)
- CaixaBank S.A. (OTCPK:CAIXY)
- Intesa Sanpaolo S.p.A. (OTCPK:ISNPY)
- UniCredit S.p.A. (OTCPK:UNCFF)
- AIB Group Plc (OTCPK:AIBRF)
- Banco de Sabadell S.A. (OTCPK:BNDSF)
- Schindler Holding AG (OTC:SHLRF)
- Epiroc AB (OTCPK:EPOKY)
- Airbus SE (OTCPK:EADSF)
- Dassault Aviation SA (OTCPK:DUAVF)
- Ryanair Holdings Plc (RYAAY)
- Spectris Plc (OTCPK:SEPJF)
- Dassault Systemes SE (OTCPK:DASTY)
- SAP SE (SAP)
- Centrica Plc (OTCPK:CPYYF)