There are solid fundamentals that fuel the expectation that the S&P Merval can reach the maximums recorded during the administration of Mauricio Macri (2,200 points measured at the CCL and adjusted for inflation in the US). For analysts, the upward trend of the Buenos Aires index remains firm and the victory of Donald Trump in the north gave a strong boost to all financial assets. In short, it had a very positive impact on the local equity market. Thus, there is winning stocks, sectors and companies. There are also some laggards, but with encouraging prospects.
For Ilan Méndez, the “boom” of bank stockswhich are the figures of the year, find their foundation, in part, in their recovery, after a period of lag. “Their current valuations reflect expectations of notable growth in the sector. In principle, the bank rally was not expected to continue in this way, and we thought that the impulse would moderate sooner; However, they extend the rise and lead every positive reaction to macroeconomic news,” he explains.
And this is due, to a large extent, to the fact that banks are actions very liquid and they are usually the first option for funds that seek to bet on the recovery of the economy, since, by being exposed to various sectors, financial entities capture the general growth of the economy. That said, the outlook indicates that results may “not be as positive as in the past” going forward.
For the PPI strategist “the profitability of the sector will probably be affected, since the lucrative business of lending money to the Government at very high rates decreased. This forces banks to compete in the loan market and in attracting fixed-term deposits. Furthermore, in a context of lower interest rates, profit margins also tend to reduce,” he indicates.
For its part, Second DerdoyResearch Analyst of Inviuexplains in statements to this medium that the banking sector is emerging as the clear winner of the year. With some stocks that show outstanding increases such as Galicia Group (GGAL) +279%; Macro Bank (BMA) +246%; BBVA Argentina (BBAR) that went up a +244% and Supervielle Group (SUPV) that advanced a +196%, he mentions.
Likewise, the two strategists agree that The energy sector also shows good performance, although more moderate. “As of the third quarter of 2024, it began to report favorable balances, driven by more competitive rates and a smaller exchange rate gap,” says Derdoy.
For his part, Ilan Méndez assures that the projects proposed by key companies in the energy sector, such as YPF, Pampa Energy, Vista Energy and Southern Gas Transport Company (TGS)are ambitious and well-oriented, which should have a more than positive impact on the profitability of these companies. “In particular, YPF’s decision to focus on shale production is fundamental to improving its profit margins,” he maintains.
Argentine stocks, which ones have upside potential?
With the undisputed winners of the year, almost at maximums, they appear on the horizon some other companies that due to the context of the economic crisis and the stoppage of public works, they were left behind, but that with the progress of the long-awaited recovery they look attractive.
Pablo LazzatiCEO of InsiderFinance, maintains in a chat with this medium that one of the stocks with upside potential is Agrometal. This is because it could benefit from investments under the RIGI in the mining and oil sectors. Furthermore, the strategist maintains that its price has shown a moderate increase since last December, which leaves room for a possible revaluation.
Lazzati also slips that, within the market as well, there are two important actions. It is about BYMA (Bolsas y Mercados Argentinos), “which shows a solid cash position in cash and bonds, accompanied by good operating results.” However, its current price does not yet reflect these fundamentals.
The second is MTRwhich represents the fusion of markets Matba, Rofex and MAE in a single action. According to Lazzati’s analysis, the current price of this paper has not yet captured the growth potential of the Argentine financial market and he states that, “if the Government manages to maintain financial stability, reduce the deficit to zero and eliminate obstacles such as taxes and stocks, “An opening to international markets would be generated.”
This in turn, with the decrease in country risk and inflation, increases the probabilities of “that large flows of foreign capital enter the countrywhich would significantly increase stock trading and give a strong boost to MTR shares.”
YPF in alta.webp
For his part, Derdoy recommends following closely Cuyana Gas Distributor (DGCU2) and Gas Distributor of the Center (DGCE). It happens that although they are not part of the leading panel, these companies present solid financial fundamentals, “with good prospects for improvement in their margins from the tariff recomposition, which increases their attractiveness for investors.”
Finally, Ilan Méndez recalls that the materials sector is the big loser of the year, largely due to the recession. Both industry and construction were greatly affected, particularly the latter, by the decline in public works. “However, this sector could become the big winner in 2025, if economic activity recovers, which would allow a rebound in some of its companies,” says the strategist. So, Loma Negra (LOMA)in particular, has the potential to change controlling companies, which would add additional value.
In this way, at the end of 2024, national equity still seems to have some upward distance to goat least until the S&P Merval reaches US$2,300 (CCL), which is the updated value of the highs reached during Macri’s presidency. A no less important fact is that analysts estimate an acceleration in stock gains, after payment of debt for bonars which expires in January 2025.
Source: Ambito
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