Morgan Stanley, JPMorgan See Japan Stocks as Cheap, Under-Owned
- Cautious sentiment driving undervaluation, Normand says
- Sheets cites improvement in Japanese return on equity
This article is for subscribers only.
Japanese stocks look attractive right now as they’re both under-owned and unusually cheap, according to strategists from Morgan Stanley and JPMorgan Chase & Co.
Improvements in return on equity are bringing Japan’s equities in line with global peers, Morgan Stanley’s Andrew Sheets and colleagues said in a note Monday, while price-to-earnings ratios are still at appealingly low levels. They also see the yen, trading at about 108 to the dollar, as cheap. JPMorgan’s John Normand said in a report Friday that a skeptical backdrop has led Japanese stocks to be under-owned and at low valuations. This, coupled with healthy corporate balance sheets, means the shares are worth another look, they said.