In an analysis published on 23 August 2021 under the title “Are stocks overvalued?” We examined the price/earnings ratios of various indices, thus contributing to the debate about potential overvaluations resulting from high equity valuations. The following Perspectives article takes a closer look at the situation of the listed ÖBAG companies, particularly in comparison to their respective peer groups.
 
For these purposes, the price/earnings (P/E) ratio for previous years is again used, or for 2021 the value as of November 30, 2021. Each ÖBAG company is compared with its own industry-specific peer group, for which the median price/earnings ratio is shown.

This analysis reveals significant differences between the companies – both in the relative levels of the P/E ratios between the sectors and in the comparison of the ÖBAG companies to their respective peer groups. For example, VERBUND's P/E ratio is almost twice as high as that of its peers, despite very strong earnings performance in recent years. This is due to a strong increase in the share price, particularly in recent years. At the same time, the median of VERBUND's peers is higher than all other median groups – an indication of higher valuations in the energy sector compared to other sectors.
 
OMV presents a diametrically opposed picture to VERBUND: in recent years, the P/E ratio has been below that of its peers (with the exception of 2016 and 2017, due to lower earnings in those years). Thanks to OMV's strong profitability, the P/E ratio as of November 30, 2021, was below 5, similar to March 2020.
 
In contrast to OMV and VERBUND, the Telekom Austria Group and Austrian Post present a relatively balanced picture. While Telekom Austria's P/E ratio is below its peer group, we recently observed a value for Austrian Post slightly above its peer group.
 
Conclusion
 
As part of our mission to ensure responsible and economically sound investment management in the interest of the Republic, we are continually confronted with valuation issues. To this end, we conduct in-depth analyses within ÖBAG in the context of the challenges and opportunities specific to each industry and company. This enables us to gain a comprehensive understanding of the individual companies; however, it is not possible to draw any definitive conclusions regarding the overvaluation or undervaluation of the shares in the ÖBAG portfolio.
 
Important information: Forecasts are not a reliable indicator of future developments. This publication is neither a marketing communication nor a financial analysis. It merely provides information on general economic data. Despite careful research and the use of reliable sources, no responsibility can be assumed for completeness, correctness, timeliness, or accuracy. This information should not be understood as a recommendation to buy or sell financial instruments or as a solicitation of such an offer. This publication is for informational purposes only and does not replace individual advice tailored to the investor's personal circumstances (e.g., risk tolerance, knowledge and experience, investment objectives, and financial circumstances). Past performance does not allow any conclusions to be drawn about future developments.
 

Johanna Feurstein has headed Investment Controlling at ÖBAG since 2019 and regularly publishes analyses and capital market trends. Prior to joining ÖBAG, Johanna Feurstein gained extensive experience in various positions both in Germany and abroad, including in corporate valuation and the energy sector. In addition, Johanna Feurstein focuses on developments related to sustainability in the corporate sector and, in addition to a diploma in International Business Administration, also completed a master's degree in Environmental and Bioresource Management.