Citi expects UK earnings to fall by an average 15% next year, meaning that the market is trading at 12 times 2012 top-down forecasts (this is in line with the last decade’s average but below the long-run average multiple of 14). Nevertheless 2012 is expected to be a trough earnings year: “Below average or average multiple for trough earnings is an attractive entry point in our view.”
The broker notes that with markets dependent on binary events such as the survival of the euro, setting index targets is not at all simple. Over the last five days only, the Footsie has traded between around 5,15
0 and 5,596 (today’s intraday high).“The UK is the second cheapest market in the world using 2012 earnings forecasts. That is the good news. However, it also forecast to deliver the second slowest earnings growth bottom up, with only CEEMEA [Central Eastern Europe, Middle East and Africa] slower and cheaper,” Citi said.
Using a price-to-book valuation, the broker says that the UK is ‘mid-table’, but on a dividend yield basis it is among the most attractive markets, second only to Europe. read FTSE 100 expected volatile 2012
“Overall the UK is a value market compared to the world. While forecast growth is slower in 2012, the benefit of being outside the Eurozone provides a degree of downside risk protection against the Euro sovereign crisis.” For the latest updates on the stock market, visit Stock Market Today
UK earnings 2012, uk stock market forecast 2012, will uk stock futures go in 2012, FTSE 100 Forecast 2012, uk market preditions 2012, uk economic crisis 2012, Citigroup Global Markets 2012 For the latest updates PRESS CTR + D or visit Stock Market news Today
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