JPMorgan turns bullish on UK stocks for the first time since the Brexit vote

JPMorgan turns bullish on UK stocks for the first time since the Brexit vote

LONDON — has upgraded U.K. stocks to "overweight," ending years of caution on British equity markets which the bank said are now trading at a "record discount." The Wall Street giant had held a longstanding cautious call on U.K. equities since the Brexit referendum in 2016, before moving to "neutral" in July 2020 after a particularly dire spell for U.K. stocks and after the worst of the coronavirus pandemic. With U.K. equities having delivered a more range-bound performance against their transatlantic and European peers over the past 12 months, however, JPMorgan on Monday upped them to overweight in both a European and global context. Since the , U.K. equities have lagged the U.S. by a cumulative 50% and the euro zone by 24%, JPMorgan Head of Global and European Equity Strategy Mislav Matejka highlighted in a research note. JPMorgan's aggregated data showed that the U.K. has opened up a "record discount" versus other regions, both on a price-to-earnings and a price-to-book basis. The former helps determine the market value of a company's stock relative to its financial results, while the latter is relative to the book value of the company's equity. The discount holds even when value sectors — those