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2024/09/05 / Erste Group Research

Health Care sector with attractive risk/reward profile

Rating changes: Novartis, Royal Bank of Canada, Pfizer, Alimentation Couche-Tard, Cadence Design Systems, Intel

The prospects for a medium-term rise in the global stock market index are intact. Corporate sales will rise by around +3.5% this year. The consensus estimate for earnings growth in 2024 is an increase of +6.4%. Next year, earnings growth will rise to +12.6%. The expected P/E ratio 2024 of the global equity market index is 19.8x and the global dividend yield is 1.9%. The valuation is reasonable given the positive growth prospects.

Profit growth in the most important countries in the emerging markets varies greatly. The forecast earnings growth of Indian companies is +10.1% (y/y) for 2024 and +13% (y/y) for 2025. The global recommendation list includes India's ICICI Bank as an attractive long-term buy recommendation. The earnings growth of Indian companies is higher than that of Chinese companies. Earnings growth of +7.9% (y/y) is forecast for these companies for 2024 and +7.5% (y/y) for 2025.

Novartis: High profit growth of +20% y/y in 2Q24, positive outlook for 2H24

Royal Bank of Canada: 2Q24: Net interest income up 16% y/y, adjusted ROE at 16.4%
Intel: Quality problems and high debt, negative risk/reward profile

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General information

AuthorErste Group Research
Date2024/09/05
Languageen
Product nameRecommendation List
Topic in focusEquities
Economy in focusGermany, Japan, United Kingdom, United States
Currency in focusBritish Pound, Euro, US Dollar
Sector in focusAutomobiles & Parts, Banks, Basic Resources, Chemicals, Construction & Material, Financial Services, Food & Beverage, Health Care, Industrial Goods & Services, Insurance, Media, Oil & Gas, Personal & Household Goods, Retail, Technology, Telecommunications, Travel & Leisure, Utilities
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