By Sam Boughedda

UBS analyst David Lefkowitz downgraded the agency’s view on progress from impartial to least most popular whereas sustaining their most most popular view on worth.

In a word launched Friday, the analyst stated that whereas progress shares have underperformed this yr, they suppose there’s extra to go.

“Relative valuations stay lofty. Larger rates of interest, sturdy financial and earnings progress, in addition to excessive (however falling) inflation ought to help additional worth outperformance,” stated the analyst.

Lefkowitz confirmed that they’re impartial throughout dimension segments.

“As we speak’s flatter yield curve – the distinction in yields on 10-year and 2-year Treasuries – suggests the enterprise cycle is extra mature, and it’ll probably be difficult for small- and mid-caps to outperform,” added Lefkowitz.

“Nonetheless, earnings progress stays strong and relative valuations for smaller firms are very enticing. Taking right now’s relative valuations under consideration, smaller dimension segments ought to outperform over longer-term time horizons.”