Bank upbeat for SES, Eutelsat
March 18, 2022
Barclays Bank has issued a note from its equity analysts which favours “defensive stocks” such as SES and Eutelsat. The bank says that the current economic uncertainties mean that its former recommendations for global ad-agencies such as WPP, Omnicom, Interpublic and Publicis are downgraded to ‘Equal Weight’ from ‘Overweight’.
The bank says there could be difficulties for these named businesses to outperform the market before the macro-environment improves.
“Our structural view has not changed but the world has,” Barclays states. “The current situation (Ukraine, elevated inflation) means there are cyclical risks leading the agencies to rank just below average in our risk-reward analysis.”
Instead, the bank focuses on what it describes as “defensive stocks” as an alternative to growth vs value.
“Here the Defensive names do not look stretched vs history – at a time of considerable macro uncertainty.” That’s leading it to favour cheaper stocks like Eutelsat, Vivendi, SES) and Byggfakta.(a company which specialises in software and information for the construction industry),” says Bayclays.
SES (which recently raised its shareholder dividend pay-out by 25 per cent) and Eutelsat, which also has a highly-dependable dividend, are both expected to perform well in the period 2022-2024.