How will stock market trading perform in 2024? Trends.be asks stock market watchers about their favorite stocks. This week: Rudi De Groedt, senior equity specialist at BNP Paribas Fortis Private Banking and Wealth Management.
1/ Sofina
“After a very weak 2022 and both intrinsic value and share price stabilizing in 2023, 2024 could be the year of Sophia’s resurrection.
“With interest rates falling, private equity markets gradually thawing and the flow of negative news around shares like Byju's, which the market has already implicitly fully discounted, subsiding, there are a number of strong catalysts for the still significant retention discount of 20 per cent.
“Furthermore, we expect that Sofina, as the traditional Belgian proxy for the Nasdaq, which is still powered by generative AI, will finally be able to catch up with the lag. Don’t forget that Sofina probably has the highest AI content on the Brussels Stock Exchange through its direct and indirect participations.
“Based on the extremely cheap valuation and the group's position in a number of this decade's megatrends, all lights are gradually greenlighting the stock's revaluation.”
2/ Dietrin group
“This sustainable mobility player remains an interesting investment company in Brussels. In addition to the crown jewel Belron, which will remain a source of value creation in the portfolio for a long time, other platform companies are also increasingly emerging as strong drivers of growth and profits for the coming years.”
“D'Ieteren's strong balance sheet also provides enough room to add one or two new growth platforms to the portfolio.
“Although the group is on track to exceed its aggressive ambition by 2025, the stock is still trading at a steep discount of more than 30 percent. In other words: investors only pay for Belron and get the rest of the portfolio for free.
“Here too, we expect a significant reduction in significant devaluation during 2024.”
3/ Sales force
“This US global market leader in customer relationship management (CRM) software will remain one of our favorite technology companies in 2024 for responding to AI beyond the Magnificent Seven. In the software sector, the group uses generative AI across all its CRM cloud platforms.” Customers.
“After a period in which operating profit margin rose sharply, mainly due to self-help, we expect to gradually monetize all of these AI applications. As a result, we see an acceleration in sales growth of 10 to 15 percent and a further increase in operating profit margin of 30 to 35 percent.Despite the sharp rise in prices, this scenario still offers a lot of upside potential.
4/Microsoft
“With Magnificent Seven, a Microsoft member, we have selected a defensive and dominant technology player in various sectors, such as PC productivity software, cloud computing via Microsoft Azure, gaming and cybersecurity.
“Thanks to the collaboration with OpenAI and the integration of generative AI into all of the group’s applications, we expect revenue and profit growth to accelerate in the coming years.
“With a strong balance sheet, we are also seeing significant share buybacks continue. Despite the high share price, we still find the valuation of this AI player interesting as a long-term investment.
5/ Veolia
“France's Veolia is capitalizing on trends such as urbanisation, infrastructure investments, environmentally responsible water management, waste recycling and increasing legal regulations in favor of a more circular economy.
“A significant portion of Veolia's activity is also in line with the EU Water classification. The increased geographic footprint and strengthening of the water business following the Suez Canal acquisition will support earnings, along with cost control, synergies and good flexibility during economic uncertainty.
“Veolia will launch a number of Deep diving Regulating its activities to eliminate the undervaluation of certain assets. Given Veolia's significant (and successful) operational diversification, this should help the company Sum of partsdiscount.”
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