Davy Morning Equity Briefing
Aug 16 2019
Irish households still focused on repairing their finances
Irish household debt has fallen to a fresh low of €137bn, or 120% of disposable income, the lowest level since 2003 and now the fifth highest across Europe, slightly below the UK. High savings also mean that Irish households accumulated €3.8bn of financial assets in Q1 2019, pushing net worth to €772bn – a fresh record high. However, the flipside of Irish households’ improving financial position is further declines in bank lending. Loans to households contracted by 0.3% in the year to June 2019 to €108bn.
Another double-digit increase in earnings expected in H1 2019
H1 2019 was a relatively quiet one for Kingspan but interim results (August 23rd) should reveal further impressive progress. We expect another double-digit advance in earnings, which would leave the group well placed for 2019 overall even though near-term end-market headwinds have amplified. Having approached the €50 level in early July, the stock has since fallen almost 15% in recent weeks. This has pulled back the group’s valuation to just over its five-year average while the structural investment case remains as potent as ever.