Before the bell: Biggest gains for stocks with the fewest buy ratings

Last week, equity markets maintained their strong momentum, with the Euro Stoxx 50 gaining 1.9% and the S&P 500 up 0.9%. Major indices are now showing year-to-date gains of around 10%. Hong Kong leads the pack with a 26% jump. This morning, Chinese stock markets reached their highest level in 10 years. The new record for the Bel20 also deserves a mention—it took eighteen years to get there.

Interestingly, among the Belgian heavyweights, only KBC stands out, up 38%. Argenx (-7%) and UCB (+0.6%) have largely digested their exceptional rally of 2024. Even more striking: the three stocks with the fewest buy recommendations from analysts posted the strongest gains. Umicore surged 40.3% and Cofinimmo 38.6%, while buy ratings for KBC were also in the minority. The takeaway? Going against consensus can pay off.

In Tokyo, indices rose 0.5% to 1% this morning. Chinese markets also continue to perform strongly: Shanghai climbed 1%, hitting a 10-year high, while Hong Kong gained 0.6%. Individual winners included Lenovo (+4.1%), JD.com (+3.9%), Geely Automobile (+3.7%) and BYD (+2.5%).

In Belgium, a busy earnings week lies ahead. EVS reports Tuesday, Deceuninck Wednesday, and Tessenderlo, Kinepolis, VGP and Montea on Thursday. On the macro front, the highlight will be Friday’s annual Jackson Hole meeting of central bankers, where investors will be looking for confirmation—or at least a hint—of a US rate cut.

European chemicals in a slump—but investors already knew that

At the beginning of August, we at Spaarvarkens flagged Lanxess in Germany. Last week, the specialty chemicals producer, known for additives for rubber tires, confirmed that Europe’s chemical sector is in a downturn. The company cut its 2025 EBITDA guidance to between 528 and 580 million euros, down from the previous 600 to 650 million euros.

Yet investors had already priced this in: after a brief dip, the share quickly rebounded to close at 24.9 euros. This is the kind of stock you want to buy when things look bleak. Spaarvarkens picked it up at 24.00 euros. With a stronger economic backdrop, Lanxess could almost double its results. Between 2020 and 2023, the company posted annual EBITDA of more than 900 million euros.

Probably the cheapest beer in the world

Top Danish companies seem to be struggling all at once. Carlsberg, the world’s fourth-largest brewer, saw its shares plunge 8% last week after results were released, bringing its decline since June to 25%. This is despite solid earlier performance—shares are still up 9% year-to-date.

Results showed modest volume growth in the second quarter and operating profit (EBIT) up 3.5%. Not spectacular, but not nearly as poor as the stock reaction suggests. For the full year, management still expects EBIT growth of 3% to 5%. Unlike AB InBev, Carlsberg focuses mainly on Europe and Asia. Analysts at Bank of America point out that Carlsberg, trading at just 12.5 times expected earnings, looks undervalued. That’s even cheaper than AB InBev at 14.8 times.

Did you know…

The Bel20 is not the only index that had to wait so long for a new peak? The Spanish IBEX-35 and Austria’s ATX have yet to surpass their 2007 highs, even after gains of 31% and 38% this year, respectively.

This article was translated from Dutch and was originally published on Spaarvarkens.be.