Index-fundamental convergence, cautiously optimistic after first half.
In the first nine months of 2024, the number of companies listed on the EGM was 208. There were only 17 IPOs, slowing down from 27 last year. Total capitalization is 9.7 billion euros, with an average of 46.8 million.
Over the past year, the FTSE Italia Growth has recovered around 5% and EGM companies have shown an average six-month growth in revenues in line. This represents a reversal of the trend, considering that in the last three years, the downward trend of the EGM index has not been justified by a worsening of company fundamentals.
Although the convergence between fundamentals and the index gives relief to the segment, we note that the first half of the year has disappointed the consensus, which has reduced both growth and margin projections. Revenues are now expected to grow by 18% in 2024, compared to the 20% estimated five months ago. The EBITDA margin is seen stable at 14% on average this year versus the 15% estimated in May.
The question remains whether possible future initiatives to support the EGM will lead to an acceleration of this convergence. Are we cautiously optimistic? Find out the report by Francesca Sabatini, Head of Equity Research, and Michele Calusa, Equity Research Analyst of Banca Profilo.
