Stock Market News

Citi Says Europe Too Bullish on Equities

2022.09.01 16:33

Citi Says Europe Too Bullish on Equities

By Geoffrey Smith 

Investing.com — European analysts are too bullish on their local stocks, despite a drop of around 20% so far this year in benchmark indices, according to Citigroup analysts.

Citi’s team of European equity strategists said in a note to clients on Thursday that, while their own current advice is to buy the dips in European equities, they’re concerned by the fact that sell-side analysts are almost unanimously bullish.

“This measure of consensus buys against sells is up near peak bullishness,” the note said. “It has been a contrarian sell signal in the past, with extreme bullishness preceding significant market falls.”

Citi notes that it takes an awfully long time – six months – for European analysts to translate downward revisions to their earnings forecasts into recommendation downgrades. While they have begun to downgrade their forecasts, the recommendations are still largely bullish, except in transportation.

Citi believes that their rivals in Europe have been lulled into a false sense of optimism by the decline in valuations this year, not taking into account the earnings downgrades that seem likely to follow the sharp deterioration in the economic outlook for Europe due to Russia’s invasion of Ukraine. That’s particularly true for the semiconductor sector, where the likes of Infineon (OTC:IFNNY) and BE Semiconductor  (OTC:BESIY) have fallen over 40% this year, while STMicroelectronics (NYSE:STM) has fallen over 30%.

Energy and retail are two other sectors where sell-side bullishness is most pronounced – the latter standing out particularly given the poor outlook for household finances with energy bills set to go through the roof in the second half of the year.

Among the individual stocks that Citi’s team see most at risk from being caught out by downward earnings revisions are U.K.-based betting company Entain (OTC:GMVHY), homebuilder Persimmon (LON:PSN) and German fashion and athletic apparel group Puma (ETR:PUMG). French grocer Carrefour (OTC:CRRFY) and German-based meal delivery group HelloFresh (OTC:HLFFF) are also on the list of ‘buys at risk’.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 98,863.49 0.86%
ethereum
Ethereum (ETH) $ 3,418.12 3.81%
tether
Tether (USDT) $ 1.00 0.12%
solana
Solana (SOL) $ 259.29 1.61%
bnb
BNB (BNB) $ 671.05 8.09%
xrp
XRP (XRP) $ 1.55 10.67%
dogecoin
Dogecoin (DOGE) $ 0.471778 19.21%
cardano
Cardano (ADA) $ 1.09 22.43%
usd-coin
USDC (USDC) $ 0.99999 0.03%
staked-ether
Lido Staked Ether (STETH) $ 3,416.14 3.69%
tron
TRON (TRX) $ 0.21963 11.03%
avalanche-2
Avalanche (AVAX) $ 43.07 13.54%
shiba-inu
Shiba Inu (SHIB) $ 0.000028 12.91%
the-open-network
Toncoin (TON) $ 6.07 10.68%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,039.53 3.44%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 98,497.39 0.44%
stellar
Stellar (XLM) $ 0.441162 52.83%
polkadot
Polkadot (DOT) $ 8.13 34.61%
chainlink
Chainlink (LINK) $ 17.37 15.10%
bitcoin-cash
Bitcoin Cash (BCH) $ 536.08 12.43%
sui
Sui (SUI) $ 3.59 2.54%
weth
WETH (WETH) $ 3,420.39 3.80%
pepe
Pepe (PEPE) $ 0.000022 8.68%
leo-token
LEO Token (LEO) $ 8.63 0.40%
near
NEAR Protocol (NEAR) $ 6.42 15.48%
litecoin
Litecoin (LTC) $ 103.17 15.30%
aptos
Aptos (APT) $ 12.89 9.33%
uniswap
Uniswap (UNI) $ 10.65 14.92%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,588.64 3.57%
hedera-hashgraph
Hedera (HBAR) $ 0.151445 15.99%
internet-computer
Internet Computer (ICP) $ 11.70 20.44%
crypto-com-chain
Cronos (CRO) $ 0.19839 7.25%
usds
USDS (USDS) $ 1.00 0.62%
ethereum-classic
Ethereum Classic (ETC) $ 30.48 11.35%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.565209 24.53%
kaspa
Kaspa (KAS) $ 0.162214 10.32%
render-token
Render (RENDER) $ 7.92 11.63%
bittensor
Bittensor (TAO) $ 533.34 8.18%
bonk
Bonk (BONK) $ 0.000051 3.29%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.16%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.40 13.63%
whitebit
WhiteBIT Coin (WBT) $ 24.69 0.28%
vechain
VeChain (VET) $ 0.044103 36.99%
dogwifcoin
dogwifhat (WIF) $ 3.54 10.93%
arbitrum
Arbitrum (ARB) $ 0.857091 9.01%
mantra-dao
MANTRA (OM) $ 3.82 4.12%
dai
Dai (DAI) $ 0.999773 0.07%
cosmos
Cosmos Hub (ATOM) $ 8.18 18.93%
blockstack
Stacks (STX) $ 2.12 13.30%
filecoin
Filecoin (FIL) $ 5.29 15.42%