Deutsche Boerse closes valuation gap with US rivals
A fiscal shift bolsters European stocks, pushing Deutsche Boerse's valuation above US competitors.
30th May 2025 08:46
by Finimize newsroom from Finimize
What’s going on here?
Deutsche Boerse shares have jumped nearly 30% this year, briefly pushing its valuation to 25 times expected earnings, outperforming major US rivals such ICE and Nasdaq.
What does this mean?
The gap between European and US stock valuations is closing, and Deutsche Boerse is at the forefront of this trend. Thanks to fiscal stimulus and global capital flows, European stocks have seen their valuations rise, with Deutsche Boerse moving from a 12-19% discount last year to trading at 23-25 times forward earnings – a historic leap. This shift mirrors a broader pattern where European markets are drawing significant investment by leveraging unified economic policies reminiscent of the bustling 1992-1999 period. The STOXX 600 index has outperformed the US S&P 500, climbing 8.5% with over 11% projected earnings growth next year.
Why should I care?
For markets: European stocks shine under fiscal winds.
European stocks are benefiting from fiscal shifts and capital inflows, leading to a considerable rerating. Defense stocks like Rheinmetall, buoyed by increased military spending, are outpacing US rivals. Deutsche Boerse and Euronext are set to gain from market volatility, particularly with Euronext's strategic foothold in luxury brand markets. This shift underscores growing investor faith in European stocks as long-term growth opportunities.
The bigger picture: Europe's fiscal renaissance.
Initiatives like the European savings and investment union are mobilizing household savings, potentially keeping European stock valuations above 20 times forward earnings for the long haul. This marks a transformative shift akin to the cohesive policies and robust valuations of the late 1990s. Despite looming US tariffs, investment allocations toward Europe are rising, indicating a strong fiscal realignment and economic integration across the continent.
The Finimize newsroom is supported by analysts including Russell Burns, Stéphane Renevier, CFA, Theodora Lee Joseph, CFA, Reda Farran, CFA, and Carl Hazeley.
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