For 2022 Equita maintains a positive but more moderate view compared to 2021. Moncler and Atlantia enter the portfolio after the upgrade
The European stock markets (including Piazza Affari) recorded excellent performances in 2021 (the Eurostoxx 600 index closed at + 25% while the Ftse Mib at + 26.3%) in the wake of a strong rebound in GDP, a growth in profits higher than expected, an improvement in visibility supported by the European Recovery Fund and, for Italy, a risk profile that has improved thanks to the credibility granted to Prime Minister Mario Draghi (who arrived last February at Palazzo Chigi). But what are the expectations for 2022? “Looking to 2022, we continue to have a positive, albeit more moderate, view compared to 2021“. This is the position of Equita illustrated in the new Monthly report edited by Luigi De Bellis, co-manager of the study office of the sim.
A constructive view: here’s why
A view that remains constructive due to some factors, including the expectations of one economic growth that will remain robust also in 2022 (Real global GDP expected + 4.5% after + 5.8% in 2021, with China + 5.2%, European Union + 4.2%, United States + 4%), with an expansionary fiscal policy; but also the interest rate increases expected for 2022 (3 hikes expected by the Fed up to 0.9%, at most 1 hike for the ECB but up to -0.4% at the end of 2022) will, in our opinion, only cause a limited contraction in multiples which will be offset by an increase in profits and an economic cycle that will not end in 2022.
“We expect real interest rates to be still negative”, they still affirm from Equita who remain of the idea that central banks and governments have no real alternatives to pushing on nominal growth, in order to make the debt created during the pandemic phase sustainable. . “In such a context – he explains – shares represent one of the best options against the risk of inflation”.
As for the pandemic front, although temporary slowdowns linked to the variants of Covid-19 cannot be excluded, De Bellis believes that the impacts (both on the demand side and on supply chains) they will be less and less significant in light of a context of higher immunity, lower mortality and hospitalization rates and new treatments. To be added is the fact that the high level of household savings and an expanding labor market could leave room for upside in terms of pent-up demand when mobility between different countries normalizes. Furthermore, with the gradual exit from the pandemic, inflationary pressures are expected to ease.
Piazza Affari remains among the most attractive, Atlantia and Moncler join the portfolio
The Italian stock market remains among the most attractive in terms of P / E (2022-23E = 12.1x-11.5x), with earnings growth of 15% yoy in 2022 compared to 2021 (and 23% above 2019 levels). In the recommended portfolio Equita is overweight relative to the benchmark (96.5% versus the neutral weight of 90%).
Among the individual stocks, Moncler and Atlantia enter Equita’s recommended portfolio, after today’s upgrades. In particular, the experts explain that “Moncler offers an attractive combination of business quality and sustained growth (Eps peer year 2022 at + 23%), driven by company specific and therefore more visible elements, in a sector – that of luxury – which we see well positioned in the current inflationary context “. As for Atlantia, Equita believes that the equity story will have major catalysts over the course of 2022, including a 2 billion euro buyback and exposure to the re-opening theme.
Financial and energy: Equita remains positive on these sectors
At the sector level, Equita remains positive on financials, which benefit above all from a solid economic environment and energy stocks, thanks to an expected positive trend in terms of supply / demand for oil. “We continue to favor some stocks linked to the reopening, while we are underweight on technology / digital stocks (after the stunning performance in 2021 and because they are more exposed to the risk of de-rating). We have a substantially neutral exposure on utilities ”, add from Equita.