Morgan Stanley on the Ibex: “It is trading at a deep discount, but it is no longer oversold”

Morgan stanley still believe that Spanish stocks trade with “the biggest market discount“compared to the rest of the big European stock exchanges, but at the same time it indicates that the Ibex “no longer seems oversold”, after appreciating 22% in the last three months.

Remember that the index traded at levels of 6,870 points last November 6, but in a single day, that of November 9, 2020, soared more than 8%, above 7,500 points, when announcing the great effectiveness of the Pfizer against him Covid-19.

From that moment, and despite the high volatility of the Spanish equity market, the Ibex has continued to revalue until reach 8,400 points this week. It is still the most lagging European index compared to the Dax or Wall streetBut at least it has managed to trim its undervaluation.

Spain trades with the highest discount on the market“When analyzing ratios such as Price / Earnings (PE) or the book value (PBV)“Morgan Stanley notes,”but it’s actually in the middle of its 10-year range on all metrics“their experts add.

“The earnings reviews remain negative (although they have improved recently) and recent performance appears to have dislocated from expectations for earnings per share (EPS)“, they argue.

On September 22, Morgan Stanley stated that “the ratings for Spain are incredibly low“As published by Bolsamanía. Thus, after the rally caused by the ‘vaccine effect’, the Ibex continues to trade at a large discount, but more reduced than in the moments of more pessimism about the Spanish economy.


The forecasts for the Ibex are very uneven among the analysis firms. GVC Gaesco Values considers that the valuations of the Spanish stock market still contain a “fear cousin”, so it anticipates a 15% rise, up to 9,200 points, in the next twelve months.

Rent 4 Bank shuffle a 2021 target of 9,100 points on the Ibex, thanks to the improvement in mobility, the evolution of Latin America, the support of the ECB and the European Funds.

BBVA Asset Management anticipates that Ibex will end 2021 at 9,400 points. “The Spanish Stock Exchange should behave similarly to the rest of the European stock markets, that is, positive or very positive in 2021“, has assured the director of global strategy of the firm, Joaquín García Huerga.”Historically, the Ibex is a cyclical index that benefits from recovery“, added this expert.

The experts of Mapfre AM They have not set a target for the Ibex, but they have anticipated that it will not be one of the big winners in Europe. “due to the excessive weight of banks in the Ibex, and since we think that the banking sector is still not going to do especially well in 2021, so we prefer other markets such as the Italian one ”, as explained by Javier Lendines, general manager of the manager.

Analysts Bankinter neither are they especially bullish with the IBEX 35 face to 2021, but they consider that there are opportunities in some specific Spanish stocks. His forecast is that the index does not rise above 8,350 points next year.

By last, Deutsche Bank expects the Ibex to reach 9,000 points, although the head of variable income at the investment center in Spain, Diego Jiménez-Albarracín, has commented that the index “does not reflect the situation of the Spanish economy” for him great weight of banking and electricity.

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