Morgan Stanley strategists see high probability of a significant pickup in corporate activity in Europe, including M&A.
- Only missing element is likely to be continued lackluster trends in capex given weak GDP environment, low levels of capacity utilization: Morgan Stanley
- Number of factors point to rebound in M&A, including earnings/ROE recovery, rising business confidence: Morgan Stanley
- Morgan Stanley’s preferred private equity screen identifies undervalued stocks based on metrics commonly used by PE.
- Top 10 ranked stocks on list of 50: Soco International, OMV, Portucel, Fred Olsen Energy, Suedzucker, Kesko, Yara, ERG, Iberdrola, Shell
- Criteria: screens for potential long ideas by ranking stocks by 5-metrics (equal-weighted): Free cash flow to EV, EV to fixed assets, P/BV, EBIT to interest paid, div. yield (excludes cos with mkt cap <$2b)