The price of the French CAC 40 stock index and information on companies' share prices are displayed on screens suspended above the Paris Stock Exchange, operated by Euronext NV, in the La Defense business district in Paris
The fundamentals argue for a return to European small and mid-caps, which is however slow to materialize, noted Thursday Portzamparc.
The segment is lagging behind the rest of the European market, recalls Bertrand Lamielle, general manager of Portzamparc Gestion: the performance since January of the Euro Stoxx Small and Mid indices is respectively 2.55% and 2.58%, compared to 6. 73% for the EuroStoxx 50.
“The macroeconomic trend of falling rates and the absence of recession in the euro zone remains buoyant and the seasonality is favorable”, the end of the results season bringing more clarity, maintains the manager.
In a broader context of investor aversion to Europe, the return of flows to the segment is however struggling to materialize.
“The drop in rates from the European Central Bank did not translate into lower financing costs”, which would have benefited the sector, notes Nicolas Royot, co-head of the analysis office at Portzamparc Gestion.
Political uncertainties in Europe and then the United States, coupled with the slowdown in China, weighed on the situation.
The segment is in the “blind spot” of strategists, summarizes Portzamparc, while the asset class has posted six years of underperformance over the last seven years.
In France, the slight return of collections in October – 17 million euros compared to a net collection of 53 million over the rest of the year according to Portzamparc – nevertheless gives hope for a slight rebound in 2025, Nicolas Royot emphasizing that the multiples of prices to profits remain below their long-term average for the CAC Mid, at 11.8x in 2024 and 9.8x expected in 2025, against an average of 15x.
Attrition also continues in France, with 32 public takeover offers having taken place in 2024, compared to a record of 38 operations in seven years, reached in 2021.
The year 2021, on the other hand, was marked by a significant volume of IPOs, totaling 64.2 billion euros and partly offsetting withdrawals, compared to a volume of 15.3 billion in 2024.
“Companies consider themselves undervalued and prefer to delist, sometimes with the support of investment funds,” notes Nicolas Royot.
“At the same time, competition from private equity is changing the profile of companies choosing to list, favoring more mature, more profitable groups like Planisware or Exosens.”
(Written by Corentin Chappron, edited by Blandine Hénault)
