HSBC-全球投資策略-匯豐氣候雷達：水與浪費-2021.5.20-25正式版

20May2021

THISCONTENTMAYNOTBEDISTRIBUTEDTOMAINLANDCHINA

HSBCClimateRadar

EquityStrategy&Climate

Change

Global

Topthemes–WaterandWaste

Defensiveclimatethemeshaveoutperformedlately;therearesignsoffadingpricemomentumacrossglobalclimatestocks

WaterandWastearethebest-placedthemesontheHSBCClimateRadarinQ22021

Whilstthelong-termvaluationsappearattractiveforWaterandWaste,theconsensusearningsgrowthoutlookisalsorobust

WeuseourproprietaryHSBCClimateSolutionsDatabase(HCSD)andapplythequantitativeframeworkoftheHSBCClimateRadartoidentifythemostattractivesolutionswithintheclimatechange(CC)space.Wescreentenstockseach(page14,Figure19)fromthetoptwobest-placedthemesonourHSBCClimateRadar.

Fadingpricemomentum:Afterastrongpriceperformancein2020,globalclimatestockshaveunderperformedtheFTSEAllWorldindexbyc3%in2021(year-to-date).Drillingdownfurther,afewovervaluedcyclicalclimatethemesappearunderstress;theseincludeHydrogen-Gas,SolarandWind.Incontrast,thosewithdefensiveattributessuchasWaste,WaterandIntegratedPower,areshowingpositivepricemomentum.Thesedefensivethemeswerethelaggardslastyear,anditseemsthatthisyear,theyaregainingfromthede-ratingofoverheatedcyclicalclimatesectors.

Wateristhetop-rankedclimatethemeonthemeasureoflong-terminvestorsentiment.Whilstthekeyvaluationmetricsaredeepindiscount,therearesomesignsofturnaroundastheyhavebeguntorisefromextremelydepressedlevels.Wethinkthereissignificantscopeforfurtherre-rating.Theconsensusoutlookisalsoimproving–EPSestimatemomentumforWaterispositiveandconsensusearningsexpectationsareforgrowththatis11%higherthantheoverallconsensusEPSgrowthforglobalclimatestocksoverthenext12-months.

TheWasteclimatethemehasoutperformedtheFTSEAllWorldby5.1%year-to-date.Itisamongthetop-rankedclimatethemesonthemeasureofshort-termdynamics,withconsensus12MEPSgrowthforecastof14%relativetoclimatestocks.Also,long-termvaluationmetricsarerisingfromlowlevelsandremainatadiscountrelativetohistory.

PleasenotethataccesstotheHSBCClimateSolutionsDatabaseisavailableonrequest.

TheHSBCClimateRadar–themesviewinQ22021

Waste

PositiveDynamics

Topconvictionthemes

Mostattractive

Water

Water

Optimism

Pessimism

Waste

Leastattractive

Diversified

DiversifiedRenewables

Renewables

NegativeDynamics

Wind

Wind

Source:HSBC,RefinitivDatastream,IBES.Horizontalaxissignifiescontrariansignal;Verticalaxismeasureschangeintheshort-termdynamics.

FordetailsregardingaccesstotheHSBCClimateSolutionsDatabase,pleasecontactHSBCGlobalResearch.

AmitShrivastava*

ClimateDatabaseLead,EuropeanEquityStrategistHSBCSecuritiesandCapitalMarkets(India)PrivateLimitedamit1.shrivastava@hsbc.co.in+918045552759

Wai-ShinChan,CFA

Head,ClimateChangeCentre;Head,ESGResearchTheHongkongandShanghaiBankingCorporationLimitedwai.shin.chan@.hk+85228224870

Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulations

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:HSBCSecuritiesandCapitalMarkets(India)PrivateLimited

ViewHSBCGlobalResearchat:

EquityStrategy&ClimateChange●Global

20May2021

YTD,climatestockshaveunderperformedglobalequitiesbyc3%

Climatestocks–signsoffadingpricemomentum

Someunderperformancerelativetoglobalequities

Afterstrongpriceperformancein2020(seeESGandClimate:Strongpricemomentumin2020,

18December2020),andadecentstartthisyear(seeHSBCClimateRadar:Topthemes–TransportEfficiency&EnergyStorage,1March2021),weseesignsofsomefadingpricemomentumacrossglobalclimatestocksoverthepastfewmonths.Although,inaggregate,climatestocksinourdatabasehavepostedpositivereturnssofarthisyear,theyhaveunderperformedglobalequitiesbyc3%.

Asof13-May2021,theglobalclimatestocksintheHSBCClimateSolutionsDatabase(HCSD)havepostedatotalreturn1of5.2%,whichislowerthanthe8.1%returnpostedbyglobalequities(FTSEAllWorldindex)overthesameperiod.Overaperiodofalittlelessthanthelastthreemonths(i.e.sincetheendofFebruary2021),climatestocksinourdatabasehavepostedatotalreturnof3.0%vs5.6%returnclockedbytheFTSEAllWorldindex.

1.Globalclimatesectorsandthemes:someunderperformance

Forestry

y-t-d,%

Agriculture

Lastthreemonths,%*

Nuclear

Waste

BuildingsEff

IndustrialEff

Bio-Energy

Water

PollutionControl

IntegratedPower

HCSD

CIC

TransportEff

EnergyStorage

FuelCells

HGM

Div.Renewables

Solar

Wind

HydrogenGas

-45%

-40%-35%-30%-25%-20%-15%-10%-5%0%5%10%15%

PriceperformancerelativetoFTSEAllWorldIndex

Source:RefinitivDatastream,HSBC

HCSD=HSBCClimateSolutionsDatabase;CIC=ClimateInvestmentCompanies.

Pleasenote,theHydrogenGasclimatethemeisarelativelysmallclimatethemeinourdatabase,withasmallernumberofstocks,whichgenerallyleadstohighervarianceinreturns.

Year-to-datereturnasof13May2021;*lastthreemonthsrepresentsreturnsinceend-February-2021.

Investorsareturningdefensive

Therobustpriceperformanceofclimatestockslastyearwasmainlydrivenbyclean-techcyclicalcompaniesfromtheLowCarbonEnergyProduction(LCEP)sectorinourdatabase.Withinthatsector,Solar,WindandHydrogenGasclimatethemespostedimpressivereturnsof147%,86%and650%respectivelyin2020.InournoteEuropeanEquityStrategy:ESG–bubbleorsupercycle?,12May2021,wehighlightedariskthatcertainclimate-relatedthemeshavebecomeovervalued,potentiallyenteringintobubbleterritory.WearguedthattheESGpremiumthatthesethemesaretradingonismainlyduetoascarcityelementleadingto‘toomuchmoneychasingtoofewopportunities’.Increasinginvestmentinthisspaceisdemonstratedbyasurgeinthenumberoffundswithamandatetoinvestintheclimate-changedomainandasteepriseinassetsundermanagementforESG/SRIfunds,whereas,thescarcityelementisillustratedbythecurrentlimitedavenues(large-cappure-playclimatecompanies)thatthesefundshavetoinvestinto.

______________________________________

1Basedonequalweightedtotalreturnwhichincludesdividendre-investment.

2

EquityStrategy&ClimateChange●Global

20May2021

HydrogenGas,WindandSolarhaverecordedthelowestYTDreturns…

Inourlastupdate,wehighlightedearlysignsofweaknessacrossclimatethemesinthelowcarbonenergyproductionsector,withbothSolarandWindmarginallyunderperforming.Thelatestperformancenumberssuggestthatthetrendofweaknessintheirpriceperformancehascontinued.Relativelymorecyclicalclimatethemes,mainlyfromtheLCEPsector,havesignificantlyunderperformedoverthepastfewmonths.Year-to-date,threethemeswiththelowesttotalreturnrelativetoglobalequitiesareHydrogenGas(-41%),Wind(-23%)andSolar(-20%).ItisworthhighlightingthatNuclear(up11%inlastthreemonths),adefensiveclimatethemeinLCEPsector,hasoutperformed.

2.Defensiveclimatethemeshaveoutperformedlately

2.0

defensivethemes

←????→

cyclicalthemes

20%

10%

1.5

0%

(%)

Beta

-20%

totalreturn

1.0

-10%

0.5

-30%

0.0

CIC

Agriculture

Waste

Bio-Energy

Forestry

Solar

-40%

IntegratedPower

PollutionControl

Water

Nuclear

IndustrialEff

HGM

BuildingsEff

Wind

Div.Renewables

TransportEff

EnergyStorage

HydrogenGas

Betavalues*

3mreturn,rhs,%**

Linear(3mreturn,rhs,%**)

Source:RefinitivDatastream,HSBC

HCSD=HSBCClimateSolutionsDatabase;CIC=ClimateInvestmentCompanies

Pleasenote,theHydrogenGasclimatethemeisarelativelysmallclimatethemeinourdatabase,withasmallernumberofstocks,whichgenerallyleadstohighervarianceinreturns.Year-to-datereturnasof13May2021;lastthreemonthsrepresentsreturnsinceend-February-2021

*usingfiveyeartotalreturnmonthlytimeseriesrelativetoglobalclimatestocks

**representstotalreturnsrelativetoFTSEAllWorldindex.Totalreturnindexincludesdividendre-investment

Waste,Water,and

IntegratedpowerleadwithhighestYTDreturns

Incontrast,themesfromthemoredefensiveclimatesectorofEnvironmentandLandUseManagement(ELUM)haveoutperformedoverthepastthreemonths.Waste(5%),Water(1%),andIntegratedpower(2%)havebeatenglobalequitiessincetheendofFebruary2021.Thesethemeswerethelaggardslastyear,anditappearsthattheyaregainingfromthede-ratingofoverheatedcyclicalclimatestocksbyinvestorsintheclimate-changespace.

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SnapshotofflowsintoESG/SRIfunds

Equityfunds

Inourlastupdate,weshowcasedstronginflowsintoESG/SRIequityfundsin2020,whichsignificantlyoutpacedthecorrespondingflowsintonon-ESG/SRIequityfunds.WealsohighlightedthatthepositivemomentumofinflowsintoESG/SRIequityfundscontinuedinQ12021.AlthoughthelatestfundflownumberssuggestconsistentinflowsintoESG/SRIequityfundssincethen,wealsoseeasharprecoveryinflowstonon-ESG/SRIfundsoverthepastfewmonths.InUSDterms,flowsintonon-ESG/SRIequityfunds(USD361bn)sincethebeginningof2020havenowsurpassedinflowsintoESG/SRIequityfunds(USD310bn).

InflowsintoESG/SRIequityfundscontinue;thoughnon-ESG/SRIfundshavemadeadecentrecovery

400

ESG/SRIequity

1-Jan-2020,

300

non-ESG/SRIequity

200

flowssinceUSDbn

100

e

0

cumulativ

-100

-200

Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21

Source:EPFRGlobal,HSBC

ESG/SRIequityfunds’inflows(as%AUM)haveoutpacedallequityfundsoverlastfewyears

40

35

30

AUM

25

20

s,%

15

flow

10

5

0

-5

2016201720182019

2020YTD

EquityESG/SRIfunds

all-equity2021

Source:EPFRGlobal,HSBC

YTD2021dataisasof12May

Itishoweverimportanttonotethat,intermsoftotalassetsundermanagement,ESG/SRIequityfundsrepresentjust5%ofallequityfunds(asofendMarch2021).Therefore,inrelativeterms,i.e.aspercentageofassetsundermanagement,inflowsintoESG/SRIequityfundsin2020andsofarin2021,aresignificantlyhigherthantheglobalequityfunds.

ConsistentinflowsintoESG/SRIbondfundssince2020,thoughitislowerthannon-ESG/SRIbondfunds

-2020,

600

ESG/SRIbond

500

non-ESG/SRIbond

1-Jan

400

300

flowssince

USDbn

200

e

100

cumulativ

0

-100

-200

Jan-20

Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21

Source:EPFRGlobal,HSBC

ESG/SRIbondflows(as%AUM)aresignificantlyhigherthaninflowsintoallbondfunds

40

35

30

AUM

25

20

s,%

15

flow

10

5

0

-5

201620172018

20192020YTD

BondESG/SRIfunds

all-bond2021

Source:EPFRGlobal,HSBC

YTD2021dataisasof12May

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EquityStrategy&ClimateChange●Global

20May2021

Bondfunds

AsimilarpictureemergesifwelookatflowsintoESG/SRIbondfunds.TherehavebeenconsistentinflowsintoESG/SRIbondfundssince2020,totalingaroundUSD100bn.Incomparison,inflowsintonon-ESG/SRIfundsaresignificantlyhigheratUSD500bnoverthesameperiod.Nonetheless,ESG/SRIbondfundsrepresentaverysmallproportion(4%byassetsundermanagement)ofglobalbondfunds.Therefore,relativetotheirsize,theyear-to-dateinflowsintoESG/SRImandatedbondfundsaresignificantlyhigherat11.5%(asapercentageoftotalassetsundermanagementatthebeginningof2021),comparedto3.1%inflowsintoallbondfunds(asapercentageoftotalassetsundermanagementatthebeginningof2021).

HSBCClimateSolutionsDatabase-Aninvestmentopportunityintheclimatespace

ClimateRadarutilisestheHSBCClimateSolutionsDatabasetoscreenforcompaniesusedinouranalysis.TheHSBCClimateSolutionsDatabaseisourproprietarydatabasecomprisingauniverseofglobalcompaniesthatdefinestheinvestmentopportunitysetwithintheclimatechangespace.TheDatabaseisupdatedannuallyandincludescompanieswithexposureto21climatethemes.

Accesstothedatabaseisavailableonrequest.Formoreinformation,pleasecontactHSBCGlobalResearchortheauthorsofthisreport.Also,pleaserefertoHSBCClimateSolutionsDatabase-togenerateClimatealpha,forfurtherdetails.

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EquityStrategy&ClimateChange●Global

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HSBCClimateRadar–Ourtopconvictionthemes

TheHSBCClimateRadarisaquantitativetool-kitthatenablesidentificationofthemostattractiveinvestmentthemesfromtheHSBCClimateSolutionsDatabase2–adatabaseofglobalcompanieswithvaryinglevelsofexposuretoclimate-relatedbusinesses.Basedonourobjectiveframeworkforanalysingtheprevailingshort-termdynamicsandlong-terminvestoroptimism,wehighlightourbestconvictionthemesacrosstheclimate-relatedspace.

MostattractivethemesinQ22021

Water

Waste

AlthoughIndustrialEfficiencyandAgriculturearealsoplacedinthemostfavourabletop-leftquadrant,basedonaggregaterankingoftwomeasuresoflong-terminvestorsentimentandshort-termdynamics,theyarerankedlowerthanWaterandWaste.

LessattractivethemesinQ22021

DiversifiedRenewables

Wind

7.TheHSBCClimateRadar3

Waste

PositiveDynamics

Industrial

Efficiency

Water

Agriculture

Pessimism

Bio-Energy

CIC

Integrated

HGM Power

NegativeDynamics

Forestry

Transport

Efficiency

Buildings

EfficiencyEnergyStorage Optimism

Nuclear

Solar

Diversified

Renewables

Wind

Source:HSBC,RefinitivDatastream,IBES

Horizontalaxissignifiescontrariansignal;Verticalaxismeasureschangeintheshort-termdynamics.HGM=Hydro/Geothermal/Marine,CIC=ClimateInvestmentcompanies

Arrowsdenotethreemonthchangeinthepositionofmostattractiveclimatethemeshighlightedinthecurrent(Q22021)andthepreviousquarter(Q12021),ontheHSBCClimateRadar.

______________________________________

2FormoredetailsofHSBCClimateSolutionsDatabase,pleaseseeourreportentitledHSBCClimateSolutionsFramework-Aclimatechangesolutionstool-kit,12September2016.FordetailsregardingaccesstotheHSBCClimateSolutionsDatabase,pleasecontactHSBCGlobalResearch.

3ForadetaileddescriptionoftheClimateRadarandtheunderlyingvariablesusedtocreateit,pleaseseesection‘HSBCClimateRadar–Anobjectiveframework’ofthisnote.

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EquityStrategy&ClimateChange●Global

20May2021

Water–mostattractivetheme1

TAPErelativeforWaterismovingupfromthelowestlevelinyears

110

105

relative*

100

95

TAPE

90

85

80

75

11

12

13

14

15

16

17

18

19

20

TAPErelativeover5yearaverage

Source:HSBC,RefinitivDatastream

*RelativetoscreenoftargetedstocksintheHSBCClimateSolutionsDatabase

ConsensusisturningpositiveonWater:EPSestimateincreaseshaveoutpaceddecreases

9

ratio

6

revision

3

eearnings

-3

0

relativ

-6

-9

-12

13 14 15 16 17 18 19 20

3mearningsmomentum

Source:HSBC,RefinitivDatastream,IBES

Depressedvaluationsandimprovingconsensusoutlook

InourQ42020edition,HSBCClimateRadar:Topthemes–BuildingsEfficiency&Water,30

Signsofturnaround

November2020,wehighlightedWaterasoneofthemostattractiveclimatethemesandarguedthatamiddeeplydiscountedvaluations,thereweresignsofinvestorsturninglesspessimisticonthetheme.However,thethemerecordedsomede-ratingbyinvestorsinQ12021,whichcouldbeattributedtoasharpcyclicalrallyduringtheearlymonthsofthisyear,leadingtoWater–whichisamongthemostdefensiveclimatethemesinourdatabase–postingamarginalfallinitsrankingonshort-termdynamicsmeasures(seeHSBCClimateRadar:Topthemes–TransportEfficiency&EnergyStorage,1March2021).

Asdiscussedearlierinthisreport,afterarobustpriceperformancein2020,weseeaslowingmomentumacrossmostcyclicalclimatethemesinourdatabase,whereasthemeswithrelativelymoredefensivecharacteristicshaveperformedwelloverthepastfewmonths.Inthecurrentquarter,usingourRadarmethodology,Water–adefensivetheme–hasre-emergedamongthemostattractiveclimatethemesandithasagainmovedintothemostfavourabletop-leftquadrantoftheradar.Consequently,Waterisnowamongthetop-fiveclimatethemesonthemeasureofshort-termdynamics.

Also,Wateristhetop-rankedclimatethemeonthemeasureoflong-terminvestorsentiment.Therearesignsofturnaroundasthelong-termvaluationmetrics,i.e.trend-adjustedprice-to-earnings(TAPE)multipleandprice-to-bookratio,forWaterarebeginningtorisefromextremelydepressedlevels.Afterfallingtoitslowestlevelever(i.e.sincethebeginningofourdata-seriesin2009),theTAPErelativeforWaterhasmovedupby5%inthelastthreemonths.Asimilartrendisobservedforthelong-termprice-to-bookmultiplefortheWaterthemerelativetoglobalclimatestocks.Itisimportanttonotethatboththesemeasuresarestillaround15%lowerthantheirrespective5-yearaveragelevels,signifyingthatthereissignificantscopeforre-rating.

Infact,wealreadyseesignsofsomere-rating.TheWaterclimatethemeinourdatabasehasoutperformedtheglobalclimatestocksby3%andglobalequityindexby1%overthepastthreemonths.Thisalsoreflectsontheconsensusoutlooktowardsthetheme’searningsgrowthpotential.Theaggregatenumberofconsensusupwardearningsestimatesrevisionsishigherthanthecorrespondingnumberofdownwardearningsestimatesrevisions.Asaresult,onatwelve-monthforwardbasis,consensusnowexpectsWaterearningstogrow11%higherthantheglobalclimatestocks.

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29%oftheworld’spopulation

donothaveaccesstosafedrinkingwater

WeidentifycompaniesintheWaterclimatethemeasthosethatareengagedinthedesign,development,manufacture,installationandsupplyofproductsandservicesfocusedonimprovingdrainage,floodprotection,desalinationanddredging.Italsoincludescompaniesthatoffersolutionsforwaterpurification,waterinfrastructureandmanagementorcoastaldefenceschemes.

ClimateChangeandGrowingWaterRisks

Water,especiallyfreshwater,isanimportantelementforalllifeonearthandforecosystemstothrive,anditisascareresourceinmanypartsoftheworld.Climatechangeaffectsthewaterresourcesandintensifieswater-relatedrisksincludingdroughts,floods,storms,landslides,etc.Water-relatedrisksincreasethevulnerabilityofallwater-dependentfactorssuchasfoodsecurity,health,economicgrowthandsustainabilityofecosystems,whichamplifiestheadverseimpactsofclimatechange.AccordingtotheUnitedNations(UN),alargesegmentoftheglobalpopulationstilldoesn’thaveaccesstobasicdrinkingwaterservicesandthisnumberhasrisenoverthelastcoupleofdecades.Since2000,waterscarcityduetoclimatechangehasincreasedthenumberofpeoplewithoutaccesstosafelymanageddrinkingwaterinSub-SaharanAfricafrom531to747million.

10.Proportionofpopulationusingsafelymanageddrinkingwaterservice(%)

100

90

80

%World-Average

ofPopulation

70

40

60

%

50

30

20

10

0

Europe&NorthAmerica

LatinAmerica

Central&SouthernAsia

Sub-SaharanAfrica

Source:TheUnitedNationsworldwaterdevelopmentreport2020:WaterandClimateChange

Amidwaterscarcityinmanyregions,companiesandgovernmentsareexpectedtoproduceandsupplysafedrinkingwatertopeopleandtreatthewastewaterforreuse.AccordingtotheUN,29%oftheworld’spopulationdonothaveaccesstosafedrinkingwater.TheUN’sSustainableDevelopmentGoal#6,‘cleanwaterandsanitationforall’,callsformoreinvestmentindevelopingsafewatersupply,desalination,andwastewatertreatmentinfrastructuresinemergingcountries,andinvestmentinwaterconservationsystemsandsmartwaterinfrastructuresindevelopedcountries.

Fromaclimatechangeperspective,variousstrategiescanbeutilisedforefficientmanagementof

waterandwaterresources.Therefore,companiesthatofferwatermanagementsolutionssuchas

efficientwatersupplyandleakagereduction,floodwaterstorageandreuse,wastewatertreatment

andreuse,andoptimaluseofwaterinagricultureandindustries,canhelpachievethistarget.And,

wethinkcompaniesintheWaterclimatethemeintheHSBCClimateSolutionsDatabasecanhelp

investorsinfindingthoseopportunities.FormoredetailsontheWaterthemeinourdatabase,please

seeClimateAlpha–DeepdiveintoWaterclimate

theme,/R/10/NhBkxJcWZ7fj?docid=11265699August2019.

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Waste–mostattractivetheme2

Wastelong-termvaluationsarerising,buttheyremainbelowaveragelevels

140

multiples

130

120

valuation

110

e

100

relativ

90

80

70

11 12 13 14 15 16 17 18 19 20

TAPErelativeover5yearaverage

PBrelativeover5yearaverage

Source:HSBC,RefinitivDatastream

RelativetoscreenoftargetedstocksintheHSBCclimatesolutionsdatabase

Wasteoffersstrong12mforwardEPSgrowthof14%overglobalclimatestocks

(%)

25

20

growth

15

eEPS

10

relativ

5

0

Jan-18Aug-18Mar-19Oct-19May-20Dec-20

12mforwardEPSgrowth(%)

Source:HSBC,RefinitivDatastream

RobustconsensusEPSgrowthoutlook

Waste–strongpricemomentum

Wastehasnowbeenplacedinthemostfavourabletop-leftquadrantoftheclimateradarfortwoconsecutivemonths.ThoughitfellbehindTransportEfficiencyandEnergyStorageclimatethemesinourlastupdate(seeHSBCClimateRadar:Topthemes–TransportEfficiency&EnergyStorage,1March2021),ithasemergedamongthetop-twoclimatethemesinthisquarter.SimilartoWater,Wasteisalsoarelativelydefensiveclimatethemeandashighlightedearlierthisyear,wearewitnessingsomepositivepricemomentumacrossdefensiveclimatestocksandsectorsinourdatabase.Year-to-date,theWasteclimatethemehasoutperformedglobalclimatestocksby

7.6%andtheglobalequityindex(FTSEAllWorld)by5.1%.Asaresult,Wasteisamongthetop-rankedclimatethemesonthemeasureofshort-termdynamics.

Lookingatlong-termvaluationmetrics,thetrend-adjustedprice-to-earnings(TAPE)ratioforWasterelativetoglobalclimatestockshasrisensharplysinceJan-2021,whenithadfallentoitslowestlevelonrecord.TheTAPErelativeforWasteiscurrently18%lowerthanthefive-yearaveragevalue,suggestingsignificantupsidepotentialof22%fromthecurrentlevel.Thelong-termprice-to-bookmultipleforWasteisalsorisingfromalevellowerthanitsfive-yearaveragevalue.

Lookingahead,consensusexpectsWasteearningstogrow14%relativetoglobalclimatestocksoverthenext12months.Consensus’robustearningsgrowthoutlooktowardstheWasteclimatethemeisfurtherillustratedbythepositiveearningsmomentumratio,whichisamongthehighest(top-five)acrossallclimatethemesinourradarmethodology