EnVent Italia SIM downgraded to 297 euros per share (previously 366 euros) starting target price are 4 OBJECTIVESthe first SICAF focused on investments in companies listed and listed on Euronext Growth Milan, maintaining judgement on the title “To excel“Given a 24% upside potential.
Analysts note that the 4AIM “Sector 1” share price has increased by 32% in the last 12 months. surpassing Italy’s growth index which lost 11% over the same period.
The index FTSE Italia Growth continued to lag compared to Q1 2024 FTSE MIB and FTSE Mid Cap. Investors tend to favor large-caps and less risky assets such as Italian government bonds, while the EGM index continues to be weighed down by outflows from PIRs. Market liquidity remains low, with turnover down around 16% year-on-year and EV/EBITDA averaging 5.6-4.6x in 2024-25, a significant discount to its historical levels of around 7-8x.
EnVent says that historically, small-cap stocks have outperformed large-cap stocks in the year following interest rate peaks. With the imminent start of the rate cut cycle (inflation permitting), the FTSE MIB index may be less attractive to investors due to its high exposure to the banking sector. This change in monetary policy could also generate interest in the EGM market, as multiples are very low and in some cases fundamentals are really attractive, effectively materializing the so-called “small business effect“.
With the FTSEMIB/EGM ratio at an all-time high, EnVent believes a correction is possible; Who will lead the movement remains unknown. Theregovernment commitment to establish a foundation (public-private) 1 billion euros to invest in SMEs may outline a different scenario.