Real estate companies and companies with high interest expenses are obvious winners, according to the professionals.
"But also those whose customers largely finance their purchases with loans, for example, housing developers and companies with exposure to housing renovations and sales of housing," writes Esbjörn Lundevall, stock strategist at major bank SEB, in an email to TT.
Highly indebted companies benefit
Lars Söderfjäll, stock manager at Ålandsbanken, largely agrees. However, he believes that the interest rate cuts now expected are already factored into many real estate companies' stock prices.
Highly indebted companies with high interest expenses benefit. But you have to separate the wheat from the chaff.
"It's about keeping track of how the companies' financing structure looks – those with long loan binding periods won't benefit much from this," writes Söderfjäll.
Banks are pointed out as losers. Their net interest income from lending and borrowing is squeezed when interest rates fall.
"Banks are basically the only losers from lower interest rates since the interest margin decreases. Otherwise, there are only winners, I would say," writes Maria Landeborn, senior strategist at Danske Bank, in an email.
However, Lundevall believes that lower interest rates are already factored into the price you pay for a bank share today. And Söderfjäll adds that the impact on banks may be less than expected and reminds us that lower interest rates also reduce the risk of credit losses.
Consumers' purchasing power increases
Small growth companies also benefit generally from lower interest rates. They tend to be more dependent on external financing than larger and more mature companies. Moreover, they have a larger share of profit and cash flow further ahead in time, making lower interest rates more valuable, according to Söderfjäll.
"And here we still see that small companies are valued clearly lower than larger companies – over time, valuation differences tend to be small," he writes.
Retail companies – which live on consumption – should also get a boost. Not least since the interest rate cuts come in combination with lower inflation, which boosts real wages.
"Consumers' purchasing power will likely increase in most areas as interest payments take a smaller share of disposable income," writes Söderfjäll.
