STOCK MARKET BLOG MARCH 2024

by the CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS AG

MONTHLY REVIEW

International stock markets ended the month of MARCH with gains.

DRIVING FACTORS

Interest rate cut expectations despite robust economy in the USA
Robust economy in the US and Europe

EQUITIES IN FOCUS

LONZA shares in high demand following positive analyst comments

Lonza shares are benefiting significantly from positive analyst comments. After Barclays and Vontobel increased their price targets, JPMorgan followed suit, and Deutsche Bank provided a further boost with an upgrade.

The upward trend of the shares has continued since the announcement of the annual figures.

Analysts from Barclays and Vontobel have already expressed their positive views. Barclays expert Charles Pitman believes that the clouds are clearing for the pharmaceutical supplier. The key issue for the coming months will be the search for a new CEO, according to Vontobel. The last CEO, Pierre-Alain Ruffieux, left at the end of September and since then Chairman of the Board Albert Baehny has been leading the company on an interim basis for the second time. Both companies continue to recommend buying.

The US bank JPMorgan then adjusted its price target to 500 francs, keeping its positive rating unchanged. Deutsche Bank has now joined the circle of supporters by upgrading to "Buy" from "Hold". Analyst Falko Friedrichs is reassured by the confirmed targets for both 2024 and the medium term. Lonza remains well positioned in the structurally growing market for outsourced pharmaceutical manufacturing, and the share's valuation is attractive. He too hopes that the imminent appointment of a new CEO will provide positive impetus after a few difficult years.

MONTHLY OUTLOOK

Last year, the decline in inflation was one of the main drivers of the positive development on the stock markets. An important topic for the current year is the interest rate cuts by central banks. The leading US Federal Reserve Bank is expected to cut interest rates three times this year. If the US central bankers fail to meet these expectations, this could have a negative impact on the stock market boom. Jerome Powell, the head of the Fed, confirmed three key interest rate cuts at the March meeting of the US central bank. It remains to be seen whether the first will take place in June. The outlook for the stock markets therefore remains positive.

For the month of April, we expect a sideways trend without any major gains or losses at the end of the month.

SHARE RECOMMENDATION: LONZA