LIVE MARKETS-FTSE MIB seen up in 2026, but banks hit valuation ceiling

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FTSE MIB SEEN UP IN 2026, BUT BANKS HIT VALUATION CEILING

Italian stocks look set for moderate gains in 2026 with Milan's blue chip FTSE MIB .FTMIB index seen rising by 8 to 13%, said Andrea Scauri, portfolio manager at Lemanik.

"Our thesis is that the index, with financials making up around 35%, can benefit from an average EPS improvement of about 10%, but there is no room for further re-rating, particularly in banks," Scauri notes.

The portfolio manager believes cyclicals like automotive and consumer goods could enjoy both earnings recovery and multiple expansion, but banks - where valuations have more than doubled in a year to 1.6 times tangible equity - might have already exhausted that upside.

The broader outlook remains constructive for Italian stocks thanks to political stability, tighter bond spreads and earnings growth, he says. At about 11 times earnings, against 14 times in Europe, they also offer relative value.

The FTSE MIB is on course for an over 30% surge this year, more than twice the STOXX 600 .STOXX.

He also expects more M&A in 2026, involving Banco BPM BAMI.MI, and possibly also Monte dei Paschi BMPS.MI in banks, along with small- and mid-caps as falling rates revive private equity interest.

(Danilo Masoni)

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