Euronext Paris – The Hidden Gem of Europe November 25, 2022

Euronext Paris – The Hidden Gem of Europe

Table of contents

  1. Euronext Paris – The Hidden Gem of Europe
  2. Cotation Assistée en Continu (CAC40)
  3. Top French Stocks Traded on POEMS
  4. Euronext Market Hours Guide


Euronext Paris – The Hidden Gem of Europe

According to yourdictionary.com, a hidden gem is defined as “something possessing value or beauty that is not immediately apparent, which therefore has received far less recognition than it deserves”1. While there are many hidden gems abound, this particular one in Europe is not widely known. The France Stock Market, or the Paris Stock Exchange (PAR), contains dozens of famous luxury, fashion, and apparel shares.

On 15 November 2022, PAR overtook the London Stock Exchange (LSE) as the biggest stock market in Europe2. Despite this latest development, many investors are still unsure of what PAR offers. Therefore, this article was written to give you a better understanding of the PAR.


Cotation Assistée en Continu (CAC40)

CAC 40 which also means “continuous assisted trading” is the index representing the 40 highest market capitalisation companies on the PAR. Similar to S&P 500 or FTSE 100, CAC40 represents the direction of the market in PAR3. The CAC40 consists of many large companies such as LVMH, Loreal, Kering, Hermes, Airbus, and Safran.

Euronext Paris – The Hidden Gem of EuropeSource: Bloomberg Last Updated: 16 November 2022


The CAC 40 opened at 7208.73 points at the start of 2022, and is now at 6647.03 points as of 16 November. YTD it has decreased 8.57% and during this economic slowdown, the CAC40 reached its lowest at 5676.87 points and peaked at 7376.37 points.

Indices Region YTD performance
CAC40 France -8.57%
DAX40 Germany -10.16%
S&P 500 US -16.78%
HSI Hong Kong -21.56%
CSI 300 China -22.03%

Source: Bloomberg Last Updated: 16 November 2022

As seen from the table above, despite the slowing economy, the CAC40’s YTD performance has suffered a lower drawdown when compared to its foreign peers. This implies that the CAC40 is more resilient compared to the other major indices.

After the European Central Bank rate hike of 75 basis points earlier last month, the CAC40’s 1-month performance was up 11.36% as of 16 November 20224.

Here are some popular French stocks that are frequently traded by POEMS clients.


Top French stocks traded on POEMs

LVMH Moet Hennessy Louis Vuitton (FP: MC)

Louis Vuitton is a popular French luxury fashion house for luxury bags and leather goods. The growth of LVMH remains at the same pace, as the company’s reported Q3 2022 earnings surpassed analysts’ expectations. Revenue was 56.5 billion euros from Jan 2022 to Sept 2022, up 28% when compared to the same period in 2021. Strong dollar boosts may also have been a factor that increased demand5. In addition, demand in Europe, the US, and Japan was also reported to be up since the start of the year6.

With a P/E ratio of 26.46, LVMH currently has Assets Under Management (AUM) of 351.37 billion euros, the biggest within its relative industry. LVMH has an average Return On Common Equity (ROE) of 29.14%, while the industry average ROE is at 26.21%, indicating that LVMH’s performance is well above the industry average. Currently, LVMH shares are down 4.73% YTD, and the 1-month performance is up 11.62%.


L’Oréal S.A (FP: OR)

L’Oréal is a cosmetics company listed on the PAR. L’Oréal shares fell as the company missed Q3 2022 sales estimates, reporting that business in China was disrupted due to COVID-19 restrictions. However, demand continues to surge elsewhere in Europe, especially in Germany, Spain, and Britain. In addition, L’Oréal remains confident in its outlook for sales and profit for the remainder of 20227.

L’Oréal has a P/E ratio of 34.59 and also has the 2nd biggest AUM amount of 186.41 billion euros within the personal care products industry. While the (ROE) of the industry is at an average of 21%, L’Oréal’s ROE is at 20.09%. The company shares are down 18% YTD, and are currently priced at 348.25 euros per share.


Kering S.A (FP: KER)

The company, listed as one of the CAC40 holdings, is the parent of big brands like Gucci, Saint Laurent, and McQueen. Kering designs and manufactures luxury apparel and accessories. Kering’s earnings exceeded Q3 2022 expectations, and were 23% higher on group revenue, and 14% higher on a Year-on-Year (YOY) comparison basis8.

Currently, Kering has a P/E ratio of 18.51, and an AUM of 551.30 billion euros. In addition, it has an ROE of 29.46% which is slightly above the average ROE of the industry which is at 26.12%. Kering’s YTD performance is down 22.48% and is currently priced at 549.6 euros per share.


Crédit Agricole S.A (FP: ACA)

The company, specialising in investment banking and financial services, also provides insurance and investment products worldwide. The company beat profit and revenue expectations by taking took advantage of rising interest rates9. However, the shares fell after the earnings reports came out, as reported revenue fell on a YoY basis.

With a P/E ratio of 6.15, Crédit Agricole has an AUM of 29.61 billion euros. Its ROE is 7.39% below the industry average ROE of 12.66%. Battling rising inflation and a slowing economy, Crédit Agricole has an YTD performance of -23.09%. However, its 1-month performance is up 9.88%.


TotalEnergies SE (FP: TTE)

Within the oil and gas industry, TotalEnergies operates worldwide, specialising in oil, gas, and renewables energy. TotalEngeries reported a 43% boost in Q3 2022 net income compared when to Q3 2021. TotalEnergies shares remain strong as the company looks to expand oil production. Israel has also signed an initial agreement with TotalEnegies to allow the company to search for natural gas within its maritime borders10.

With the biggest AUM of 150.47 billion euros within PAR’s Oil and Gas industry, TotalEngies has a P/E ratio of 6.72, and an ROE of 32.07%, above the industry ROE of 30.62%. As the energy sector soars in 2022, TotalEngies shares are up 25.35% YTD.


Bloomberg Analysts’ Recommendations

The table below shows the consensus ratings and average ratings of all analysts updated on Bloomberg in the last 12 months. Consensus ratings have been computed by standardising analysts’ ratings from a scale of 1 (Strong Sell) to 5 (Strong Buy). The table also shows several analysts’ recommendations to Buy, Hold or Sell the stocks, as well as their average target prices.

Security Consensus Rating BUY HOLD SELL 12 Mth Target Price (US$) Upside Potential
LVMH Moet Hennessy Louis Vuitton 4.7 32 5 0 769.72 10.1%
L’Oréal S.A 3.59 12 13 4 366.44 6.5%
Kering S.A 4.28 21 11 0 624.32 15.9%
Crédit Agricole S.A 3.17 6 13 4 11.67 23.4%
TotalEnergies SE 4.28 19 9 1 66.19 13.0%

Source: Bloomberg Last Updated: 16 November 2022

Euronext Market Hours Guide

Euronext is a pan-European stock exchange and market infrastructure, currently, POEMS offers 4 markets under Euronext namely, France, Netherlands, Belgium, and Portugal. By trading with POEMS, clients have access to various exchanges. The market timing for trading is shown in the table below.

Country Exchange DST (Singapore Time) Non-DST (Singapore Time)
France Euronext 03:00pm – 11:30pm 04:00pm – 12:30pm
Netherlands Euronext 03:00pm – 11:30pm 04:00pm – 12:30pm
Belgium Euronext 03:00pm – 11:30pm 04:00pm – 12:30pm
Portugal Euronext 03:00pm – 11:30pm 04:00pm – 12:30pm

Markets will be available for trading from Monday to Friday, feel free to refer back to the table for Daylight Saving Time (DST) and Non-Daylight Saving Time (Non-DST) trading hours.

For more information, visit the POEMS website or contact our experienced trading representatives for help.


Reference:

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About the author

Thng Xiao Xiong
UK Equity Dealer

Xiao Xiong is an executive in the Global Markets Team specializing in UK markets. He is a graduate from Singapore Institute of Technology with a bachelor's in Aircraft System Engineering. He has a strong interest in macroeconomics and options strategies.

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