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2021-10-25

Mostly strong reports last week, but discounted in valuations

This weekly letter looks at the Q3 company reports, the business cycle, and valuation. We also identify investors having increased their risk premiums. Technically, Tesla stock continues to look attractive, while Volvo is at a crossroads

Although 84% of US company reports were better than expected in terms of earnings and revenues exceeded expectations in 79% of cases, analysts have on average revised down their Q4 2021 earnings forecasts by 3.2%. The S&P index had outperformed the companies’ earnings growth by 27% since March 2020, when the Covid outbreak started. 

The US 10-year Treasury yield continues to rise, while the HYG (junk bond ETF) shows a downward trend. It seems that investors are currently increasing their risk premiums. S&P500 set a new all-time high late last week with a small margin, but a Doji indicating uncertainty has emerged. While the Tesla share was flying last week, it may run into a consolidation phase. The Volvo share did not manage to raise much last week, despite a strong Q3 2021 report.

Please find out more in our weekly letter on certificates Vontobel.com: Read the weekly newsletter here.

About Carlsquare


Carlsquare is a Pan-European research firm and financial advisor, focusing on M&A, Equity
Research and Growth Equity. Carlsquare has 70+ employees with deep sector knowledge in all 11
GICS sectors. The senior equity research team have an extensive experience about the stock
environment and several business sectors. The team produces company research reports,
independent valuations and trading notes. The group have offices in Berlin, Copenhagen,
Hamburg, London, Munich and Stockholm. Read more

Contact
MARKUS AUGUSTSSON
Head of Equity Research
markus.augustsson@carlsquare.com
+46 (0)76 235 03 20

About Vontobel:

As a globally operating financial expert with Swiss roots, Vontobel specializes in wealth management, active asset management and investment solutions. Digital Investing bundles different investment solutions for private investors either directly or via ecosystems. Read more

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Mostly strong reports last week, but discounted in valuations

Författare MFN