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Today’s session was experienced in the name of recovery from the European stock exchanges which, after the sell-off on the eve of the day, gave rise to a rebound.
Wall Street is also moving in the same direction, where, however, the three main indices have already retraced decisively from the intraday tops, still revealing a certain vulnerability after yesterday’s decline.
Ftse Mib recovering after yesterday’s sharp decline. Just a rebound?
Piazza Affari is also in green light, where the Ftse Mib finished trading at 25,309 points, up 1.04%, recovering less than half of the losses accused yesterday.
Today’s movement is therefore to be framed with a view to a simple rebound and is certainly not sufficient to completely dispel the fears of investors.
Ftse Mib: focus on fears related to the Evergrande crisis
The week yesterday started in sharp decline for the European and American stock exchanges and the Evergrande case in China was weighing on the mood of investors.
The likelihood of a default by the Chinese group is increasing and fears of possible negative impacts on China’s growth and consequently on global growth are growing.
The Evergrande crisis is not the only theme to dominate the market scene, given that to this is added the expectation on the possible reduction of monetary stimuli by the Fed.
Ftse Mib: look at the Central Banks. Watch out for the Fed
The meeting of the American Central Bank will start today and will end tomorrow with the announcement on interest rates, expected by the market unchanged.
Great attention will be paid to the indications that will arrive regarding the next moves in the field of monetary policy, in an attempt to steal clues on the start of tapering.
It should be noted that the Fed meeting will not be the only catalyst these days, given that 16 central banks will meet in the current week, including that of the United Kingdom, Norway, Switzerland and Japan.
Ftse Mib: risk of short-term corrections, but Equita’s view is constructive
According to Equita SIM analysts, after the strong performance of the equity markets, the recent fears about Evergrande make short-term corrections possible. The experts of the Milanese SIM, however, do not yet see strong elements to change their constructive view on the markets.
WIIT: a buy on fundamentals
Based on the fundamental analysis, Equita SIM analysts recommend purchasing WIIT.
Their investment case on the stock is based on several points, including exposure to a structurally growing sector: the expected compound average annual growth rate on private / hybrid cloud by 2024 is approximately 10%.
Secondly, WIIT’s business model offers high visibility of revenues: multi-year contracts, with a customer base that offers good diversification in terms of revenues and end markets and high loyalty.
High visibility also of cash generation, with an EBITDA margin of around 40%, moderate capital intensity and no working capital issues.
The positive view of Equita SIM also takes into account the track record on M&A, both as a strategic rationale and as a capacity for integration, but as a discipline on the multiples paid.
Finally, among the points on which the Equita SIM investment case is based, we also find the opportunities offered by entering Germany in 2020: approximately 33% of group revenues expected by 2023.
The analysts let it be known that their valuation is based on a multiple of 25 times the 2023 enterprise value / EBITDA applied to the 2023 estimates and discounted to date.
For WIIT the “buy” recommendation is thus confirmed, with a target price of 31 euros.
Trend-online Deputy Director, born in 1978.
After completing his studies at the Classical High School “Antonio Calamo” of Ostuni I entered the world of economics.
For about twenty years I have been dealing with Stock Exchange and Finance. After having worked as a financial promoter for several years, in 2005 I joined the Trend-online team as an editor, to later become deputy director of the cylinder head. Among other countless activities, I take care of maintaining relationships with all the experts, analysts and traders, consulted daily by Trend-online.
My motto is? “Life is like a mirror, if you look at it smiling it will smile at you”.