The Irbis Index October 2023

Welcome to the October 2023 edition of The Irbis Index!

The Index tracks the market by highlighting key trends of large players across related industries.

The data for the Index is updated monthly and it uses data sources such as finance.yahoo.com.

Every month on the 5th you will receive the updated Index for the previous month and all the related trends.

To find The Irbis Index for September 2023, click here.

Key Trends for October:

In October, Cold Storage and Logistics continued to achieve the highest EV/EBITDA multiples compared to other tracked industries.

There was no change in this average multiple moving from September to October.

Likewise, Food Retailers continued to command the lowest EV/EBITDA multiple, with the multiple falling further from 5.85x in September to 5.33x in October.

The debt-to-equity ratio of Industrial REITs remained relatively constant in October at 44.8% compared to 44.2% in September.

Although very slight, this is the first uplift in debt-to-equity ratios observed in our dataset since the Irbis Index first began in July 2023 (where debt to equity was 49.1% and continued to fall in the following months to 44.2% in September).

The largest positive correlation is between the S&P500 and Cold Storage and Logistics – although the correlation fell from 0.94 in September to 0.91 in October.

Over the past year, the mean absolute error in using the S&P500 to predict Cold Storage and Logistics prices was 4.4%.

The largest negative correlation was observed between Industrial REITs and Cold Storage and Logistics as well as Agricultural Commodities and Industrial Metal Commodities.

This suggests that over the past year, when Industrial REIT prices went up, Cold Storage and Logistics stock prices were most negatively affected.

Likewise, when Agricultural Commodities prices increased, Industrial Metal Commodities were negatively affected.

Although correlation does not prove causation, when Cold Storage and Logistics stock prices are used to predict Industrial REIT prices over the past year, the mean absolute error was only 3.9% suggesting some level of dependency.

Warehouse REIT, Electrolux AB, and Smurfit Kappa continue to top the list of positive target price variations.

Kion Group, a leading supplier of forklifts and warehouse equipment as well as automation technology and software solutions, makes the list this month with a positive target price variation of 39.8% suggesting that analysts are optimistic about the company’s performance or the sector in general.

Meanwhile, Sainsbury’s remains the only company with a negative difference between its target price and actual price within our dataset.

Electricity prices across all countries that make the Index decreased in October except for Great Britain and Italy where electricity prices rose.  

France consistently relies on Nuclear as their main source of power however the percentage declined to 59% in October compared to 75% in September.

Germany, Luxembourg, and the Netherlands continue to rely on Wind as their top source of power.

Meanwhile, Belgium which relied on Wind (35%) in September now has Nuclear as their top source of power, with their percentage of energy generated from wind falling to 30%.

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