© Reuters. Even Europe’s Worst-Performing IPO is a Buy for Bullish Analysts

(Bloomberg) — Analysts are notoriously wary of issuing sell ratings on stocks and nowhere is this more apparent than in Europe’s market for initial public offerings.

For the 18 companies that listed in Europe this year with an offer size of at least $100 million and that are covered by analysts, every rating bar one is either buy or hold, according to data compiled by Bloomberg. The only sell is by DNB ASA‘s Ole Martin Westgaard on Norwegian internet company Adevinta AS.

The latest example of IPO bullishness is Global Fashion Group SA, the region’s worst-performing new offering this year. At least three analysts — from banks that underwrote the sale — began coverage Thursday on the Luxembourg e-commerce company with buy recommendations. The stock is down 21% since it began trading last month.

It’s not uncommon for banks that manage an IPO to publish favorable research, and Global Fashion is no outlier. But analyst bullishness on recent listings is interesting because investors are proving increasingly skittish about putting money in new stocks at what many of them say are top-of-the-market valuations.

Traton SE, the Volkswagen (DE:) AG trucks unit that went public last month, was also greeted with no sell ratings when banks began coverage on Wednesday. The stock is down almost 10% since its IPO. Rovio Entertainment Oyj, the Finnish maker of the Angry Birds game, met with analyst bullishness after its 2017 IPO, even as the stock slid.

There’s little correlation between how a newly listed stock performs and how it is subsequently rated by analysts. Adevinta is the top-performing IPO in Europe this year after Network International. John Mattson Fastighetsforetag AB, the next best performer, has two hold ratings with no buys.

Global Fashion’s IPO was priced below the company’s anticipated price range, with weak demand leading the company’s owners — Swedish investment firm Kinnevik AB and German startup factory Rocket Internet SE — to take up about 50% of the shares on offer.

Other listings that priced at the bottom end of their initial price ranges, including Traton and Airtel Africa Plc, now have at least five analysts each recommending that investors buy the stock.

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