Erste Group analysts favour defensive sectors, such as utilities, telecoms and pharmas
Cyclical sectors and financials, which suffered the most from the record-high risk aversion and overdone fears of total economic collapse, have outperformed industries deemed as defensive.
Overall, Erste Group analysts still favour more defensive sectors, such as utilities, telecoms and pharmas, although these sectors have posted the best performances over the entire cycle since October 2007.
“We expect more defensive industries to now be a bit more in the spotlight again, since they should have weathered the current situation better, meaning with much less spectacular moves in their financials”, Erste analysts say.
In Europe, utilities are seen as growing between 3% (2009e) and 9% (2011e) while telecoms are rather flat, while healthcare is expected to produce improving growth rates of between 6% in 2009 and about 13% in 2011.
“Interestingly, EPS growth of about 22% is expected in the CEE region for 2010”, says Erste.
Specialists don’t recommend cyclical to investors, at least not for the reminder of this year, as an improvement is expected no sooner than 2011.
Erste sees a strong upswing in financials, even on 2009 expected earnings. Logically, insurance has some part in this development, but (more strongly) analysts see banks being revised in a positive direction, indicating that the situation is not as bad as initially thought.
Overall, Erste Group analysts still favour more defensive sectors, such as utilities, telecoms and pharmas, although these sectors have posted the best performances over the entire cycle since October 2007.
“We expect more defensive industries to now be a bit more in the spotlight again, since they should have weathered the current situation better, meaning with much less spectacular moves in their financials”, Erste analysts say.
In Europe, utilities are seen as growing between 3% (2009e) and 9% (2011e) while telecoms are rather flat, while healthcare is expected to produce improving growth rates of between 6% in 2009 and about 13% in 2011.
“Interestingly, EPS growth of about 22% is expected in the CEE region for 2010”, says Erste.
Specialists don’t recommend cyclical to investors, at least not for the reminder of this year, as an improvement is expected no sooner than 2011.
Erste sees a strong upswing in financials, even on 2009 expected earnings. Logically, insurance has some part in this development, but (more strongly) analysts see banks being revised in a positive direction, indicating that the situation is not as bad as initially thought.