In this publication we provide an updated single-name view on all of the European non-financial corporates under our coverage.
We recommend the following investment strategies within EUR Corporates for the coming months:
- Still Overweight IG Corporates vs. HY – particularly in Europe.
- Avoid excessive duration in portfolios
- Within EUR IG Corporate Senior bonds: stick to names with strong fundamentals or identified positive catalysts.
- Within High-beta, stick to “quality”: we believe that Corporate Hybrids offer a better investment alternative
- Unlike Crossover-rated names names, we see EUR Hybrids as somewhat of a ‘refuge’ especially against BB-rated Seniors (supportive technical -YoY issuance is flat at EUR8bn YtD24-,
Top picks in EUR Non-Financial Corporates:
- EUR Utilities and Energy: EDF Hybrids, ENEL Hybrids and Iberdrola Hybrids, EDP (Seniors & Hybrids), Snam and FCCSER
- EUR Other sectors: Vodafone ( Seniors & Hybrids), Merlin, Lar España, Werfen, Abertis Hybrids and Ferrovial.
Top pans in EUR Non-Financial Corporates:
- EUR across all sectors: ERG (we prefer ANESM), Enagas, Italgas, Colonial (we believe MRLSM's bonds should trade inside COLSM's), Telefonica Seniors, Cellnex (relative value vs AMT).