Merry Christmas! – Ibex 2020 outlook: 10,005 points and a +4.5% potential growth


Bankinter | We maintain the Neutral recommendation. Our valuation for the Spanish stock index points to 10,005 points, which represents a potential of 4.6% as of Dec-20 and an estimated dividend yield for the 4.5% index, the highest among the indexes analyzed.

The target price increases slightly compared to the previous quarter (+ 2.8%), which already considered a time horizon Dec-20. Our valuation assumes an Implicit Percentage of 13.6x 2020e compared to a historical average of 17.3x and 13.8x in 2018.

The most relevant variations in the hypotheses since our last review:  

(i) The BPA estimated by consensus raises an increase of + 8.3% 2020E, from + 3% expected for the whole of 2019E. Both were revised down -5.2% and -3.8% 2019 and 2020 respectively since our last valuation.

(ii) The 10-year bond has rebounded by 20bp .;

but   (iii) we have revised the risk premium down 70bp, given the lower risks of a slowdown in the European economy and a better US-China trade tone.

(iv) The Bottom Up of our valuations of the index firms improves 2.5% in the period (up to 10,406 points, on which we apply the same 5% discount in the central scenario as in Top Down).

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.