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Highlights
- JP Morgan has revised its outlook on the UK stock market. In its latest rating upgrade, the bank has given an “overweight” rating and has turned bullish on the UK stocks.
- JP Morgan’s research note states that the UK listed stocks are currently available at a discount both on price to earnings (P/E) and price to book (P/B) basis.
The US-based banking giant JP Morgan has revised its outlook on the UK stock market. In its latest rating upgrade, JP Morgan has given an “overweight” rating and is bullish on the UK stocks. The bank also said that the UK listed companies trade at record discounts compared to other regions.
JP Morgan had a cautious view of the UK stock market since 2016 when the Brexit referendum came into effect, fearing a slowdown in the UK economy. However, the bank revised its rating one notch higher to “neutral” in July 2020 after the Covid-19 pandemic.
The UK stock market has trailed compared to the US and European markets since 2016. The UK equities have lagged 50% compared to the US market, while its returns are less by 24% compared with the European market.
JP Morgan’s research note states that the UK listed stocks are currently available at a discount both on price to earnings (P/E) and Price to book (P/B) basis. These two ratios are key valuation parameters, which most investors use to determine the value of the stocks before investing.
JP Morgan’s Head of Global and European Equity Strategy Mislav Matejka said that the bank would prefer investing in mid-cap companies from the FTSE250 index and would prefer domestic businesses. Bank’s investment team has already cut down its exposure in Japan and has determined 25 UK stocks to take advantage of discounted valuation and make a high return on investment.
© 2021 Kalkine Media
Let us look at some of the FTSE listed stocks determined by JP Morgan for investment:
Vodafone Group Plc (LON: VOD)
The company operates as one of the largest telecom service providers in the UK and the European markets. It serves over 315 million customers across different geographics. The company has given consistent growth in revenue over the years. It reported €11,101 million in revenue, a rise of 5.6% during the first quarter of FY22. The company’s core business of offering different services registered revenue growth of 5.6% during the period. In addition, the company has a positive future outlook and is on track to deliver adjusted EBITDA in the range of €15 to €15.4 billion, while its adjusted FCF to be at least €5.2 billion for FY22.
Vodafone Group Plc’s current market cap is £30,607 million, while its current dividend yield stands at 7.0% as of 10 November 2021.
Jupiter Fund Management Plc (LON: JUP)
FTSE250 listed company manages different financial products like mutual funds, client focused portfolios, hedge funds and many other products. The company has total assets under management of £60.7 billion, an increase of £0.4 billion from last quarter. The company’s investment funds have given higher returns due to favourable market movement in the last two quarters, which has benefited its business with net inflows across its different funds.
Jupiter Fund Management Plc current market cap is £1,435 million, while its current dividend yield stands at 6.6% as of 10 November 2021.
