European Equities: Italian And Spanish Equity Valuations Diverge

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European equities have had a rough month, but Barclays analysts Ian Scott and Joao Toniato continue to recommend periphery stocks based on a combination of low valuations, rising confidence, and the ongoing Draghi put. They argue that current equity prices, especially in Spain and Italy, make sense when profits are low but haven’t priced in consensus growth. Cheaper credit boosts consumer confidence in Spain, Italy Spanish and Italian sovereign bond spreads have been falling against the 10-year Bund ever since ECB president Mario Draghi said he would do ‘whatever it takes’ to keep the eurozone intact in mid-2012, and they…

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