20th Sep 2022 14:08
(Alliance News) - Jefferies said Tuesday it feels the equity market in Ireland has been "unfairly judged" by investors, being lumped in with the rest of the EU even as its economy fares better than the rest.
The US investment bank noted that economic forecasts for Ireland and the sales forecasts for its listed companies are being revised up, and the country enjoys a trade surplus while others face deficits.
"We upgrade to 'bullish'," Jefferies said, from 'modestly bullish'.
"There is no rule that says an equity market must be correlated with the economy in which it is domiciled," commented Sean Darby, global equity strategist, and Kenneth Chan, quantitative strategist.
"Ireland is a case in point. The economy is doing well and so are many of the index constituents, but market multiples have de-rated."
Irish shares currently trade on a 12.5 times forward price-earnings ratio, Jefferies said.
"Although the Irish index doesn't have any 'growthier' technology names, the bourse was impacted by higher US bond yields as the market was trading on rich multiples," the bank explained.
"Nevertheless, the diversified revenue of the Irish index compared to its peers as well as a robust local economy should ensure that the bourse outperforms its peers in the next 12 months."
Jefferies has a 'buy' rating on all the following Dublin-listed stocks: CRH PLC, Smurfit Kappa Group PLC, Flutter Entertainment PLC, Glanbia PLC, Greencoat Renewables PLC, Dalata Hotel Group PLC and Malin Corp PLC.
By Tom Waite; [email protected]
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