European stock markets are no longer trading at a discount to the post-Covid average, according to a recent report. The index STOXX 600 It now trades at a 10% premium to its average since 2022.
What happened
The report, published by The Economistindicates that the Stoxx 600 is trading at a 10% premium to its average since 2022, with a P/E (times earnings are captured in the share price) of 14.2 times compared to 12.9 times over the past two years.
Fuente: Bloomberg
On the other hand, the S&P 500 does not offer any discount with respect to its own historical average and its current premium with respect to the post-Covid era is almost 15%. The index Ibex 35 Spain’s stock remains at a slight discount compared to the average of the post-Covid era, with a current multiplier of 10.5 times compared to the 10.8 times at which its profit was purchased, on average, then.
Fuente: Bloomberg
The Ibex 35 has shown strength in its earnings estimates for this year, which makes its multiplier remain at a more attractive price for investors. Unlike the Stoxx 600 and the S&P 500, the Ibex 35 sees an increase in EPS (earnings per share) estimated for this year of 7% compared to what was forecast on January 1.
Fuente: Bloomberg
You can also read: Ibex 35 and Europe anticipate severe falls after Asian collapse
Because it is important
Investors should remain cautiously optimistic as they continue to face a number of headwinds in the second half of the year, led by politics, geopolitical tensions, potentially higher interest rates for longer, slowing consumer spending and elevated levels of government debt, according to Mabrouk ChetouaneHead of Global Markets Strategy Natixis IM.
Photo courtesy of Pixabay
You can also read: New agreement between Repsol and Volotea to promote sustainable aviation in Spain
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