Athens Stock Exchange – The “cheapest” market in Europe according to international companies

The Greek stock market is the most attractive in Europe, while it offers high dividend yields and the corporate profit potential of listed companies seems strong, according to the estimates of domestic and foreign investment houses.

JP Morgan estimates that Greek stocks are the cheapest in the Eurozone, while the dividend yields of Greek stocks are high.

For the next 12-month period, according to JP Morgan, the price index for profit (forward P / E) will be at 12.6 times this year, while the P / E index for European stocks will be at 17 times, making the domestic market the “cheapest” in Europe, with a small difference from the second country which is Italy, with an index of 13.1 times.

At the same time, the dividend yield for the next 12 months is much higher, at 2.8% compared to 2.1% for European stocks. JP Morgan estimates that in Greece the growth rate of profits in 2021 will move to + 25%, to + 14% in 2022 and to + 11% in 2023.

In terms of Greek stock valuations, Citigroup has significantly improved its estimates, estimating that earnings per share are expected to fall by 0.5% on an annual basis (including banks) compared to a previous estimate of a fall of almost 7 %, while in 2022 they will increase by 27.4% which will be the highest increase in Europe.

The estimated P / E index in the Greek market for 2021 is 12.4, while for 2022 it is 9.7.

The P / E in the US market from 22.1 this year will move to 20.6 in 2022, while in Europe from 15.6 this year to 14.8 in 2022, according to Citigroup.

At the same time, the dividend yield is at the level of 3.7%, above the average in Europe and the USA, which stands at 3.1% and 1.3% respectively.

According to Eurobank Equities, Greek shares are traded, on average, with a 30% – 35% discount compared to their counterparts in the EU.

According to the stock market, the dynamics of corporate profits seems strong, while the valuations are quite attractive and the Greek shares have not yet fully recovered from their Covid-19 losses.

Greek shares

Despite the short-term uncertainty, in the view of stock market analysts, the investment hypothesis for Greek shares – against international markets – remains quite attractive:

-The Greek economy is experiencing stronger economic dynamics than the EU (GDP of the second quarter + 16% on an annual basis compared to 13% for the EU).

Surplus savings (€ 30 billion accumulated since March 2020) are likely to support consumer spending in the coming quarters.

-The PMI / economic climate seems stronger than in Europe (both close to recent / multi-year highs).

-The Greek economy is at the beginning of the cycle (and not in the middle of the cycle),

-Greek shares are traded, on average, with a 30% -35% discount compared to their counterparts in the EU.