Goldman Sachs: New increased target price of 1,375 points for the General Index on the Athens Stock Exchange

Goldman Sachs raises again the target price for the General Index of the Athens Stock Exchange. In particular, the American investment house sets the bar at 1,375 units, against 1,200 units which was its previous estimate and 1,278 units. It is worth noting that its current valuation and the upside from current levels is less than 7% over the next twelve months. The expected return of the General Index on the Athens Stock Exchange is 15% in dollar terms against 13% applicable in emerging markets.

The above places the domestic stock market in the top in terms of upside margin, and the valuation of the domestic index relative to emerging markets emphasizes this positive picture.

The valuation

The valuation ratio P/E (price to earnings) for the domestic market stands at 8.8 times and in terms of P/BV (price to book value) at 1.1 times, figures that rank the domestic market among the most attractively valued. The corresponding emerging market ratios are 12.2 times in P/E terms and 1.6 times in book value terms, with the discount approaching 30% in P/E terms and exceeding 30% in P/BV terms .

It should be noted that the attractive valuation is enhanced when earnings per share (EPS) are taken into account. The American bank estimates that they will strengthen by 8% in the next twelve months, while the analysts’ estimate for 2024 places the corresponding increase at just 2%. For the emerging markets index, the average change in earnings per share will be around 10% this year and at 8% for the Central and Eastern Europe, Middle East and Africa (CEEMEA) index. Margin of growth of domestic market is higher than CEEMEA markets for 2024.

The estimate that is among the highest among markets for the General Index of the Athens Stock Exchange is the dividend yield at 4%, as the average dividend yield for emerging markets is at 3%. The US investment house cuts its target price for the MSCI Emerging Markets index to 1,100 from 1,150 previously and a 7% upside, while it expects a 9% upside for the European Stoxx 600 to 500 and a 6% upside for the S&P 500 index at 4,700 points.