The current levels at which the IBEX 35 is hovering, around 9,400 points, pale in comparison the all-time high of 16,000 points from 2007. To reach new heights, the Madrid selective price would need to increase by 70% compared to current levels. And something very similar is happening with some of its big heavyweights, which are selling for a bargain price when you compare their current market caps to what they’ve achieved in better times.
Aside from Inditex, only two IBEX 35 stocks reached a market cap of €100,000 million at some point in their history. The first of these was Telefónica, although we have to go back to 2007 (the same year as the Ibex’s highs) when its stocks were above €22. It is currently well below €4 and has increased by more than 13% over the year.
The current trading levels result in a market value of the telecommunications company of around 21,120 million euros. In other words: almost one fifth of the achieved market capitalization 16 years ago. With a more modest objective, it is also far from the price of 5 euros that it reached last year.
Even if analysts do not assume that the company can achieve these numbers in the medium term, they are in fact giving it a vote of confidence. On average, the analysts that cover Telefónica put the target price of their shares at EUR 4.42, a rating that suggests this an appreciation potential of 20% in relation to the current price, according to data from Reuters. The average recommendation is Hold.
Another heavyweight of the IBEX 35, which reached a market capitalization of over 100,000 million euros, was Banco Santander, which marked this milestone in April 2015. Its current value on the floor is around 54,000 million, almost halving it from its peaks. In between, the purchase of a troubled company like Banco Popular (2017) and a complicated situation for banks: when it seemed that interest rate hikes could turn old laurels green again for the action, fears of a financial crisis like the one that 2008 has meant since erupted March price brake.
Still, the truth is that Santander is still up 19.2% so far this year, and analysts are confident that this upward trend will continue once doubts about world banking appear to have calmed, according to data collected by Reuters on average analysts give the stock a “buy” rating with a Price target of 4.61 euros 41% above the current price.
On a smaller scale than what’s happening at Banco Santander or Telefónica, Cellnex is another company that managed to become a heavyweight on the Ibex 35 before crashing. The company has been one of the big protagonists of the trading floor in 2021, surpassing the market cap of 40,000 million in August this year, which made the value one of the greats of the selection.
Almost two years later, its market value stands at €24,900 million, despite managing to recover by 18.5% in the first half of 2023. Analysts who monitor the share give it a buy recommendation with an average target price of EUR 48.69. This assessment translates into a potential of 33.8% over the next 12 months.
INDITEX, smooth sailing to new highs
The only company on the IBEX 35 to break the €100,000 million mark is Inditex, building on old laurels it had already achieved in November 2021. The textile giant achieves a market cap that goes beyond that 107.460 million euros.
value is found in the zone of historic highsis just pennies away from the $40.00 it hit at the end of June, after climbing 41.4% so far this year.
Inditex also retains the confidence of the analysts: the average of the analysis companies that cover the share gives Inditex a buy recommendation and a target price of EUR 35.82. 3.95% above the current price. If this level is reached, the market value would be almost 111,640 million euros.
The textile giant has accelerated gains since reporting its results on June 7. The company ended the first quarter of its fiscal year (between February 1st and April 30th) with a net profit of 1,168 million euros, an increase of 54% compared to the same period last year. Sales increased by 13% to 7,611 million euros, with a “very satisfactory” development both in-store and online, and positive in all geographic areas and in all formats. Revenue at constant exchange rates increased 15%.
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