Barclays analysts remain optimistic about growth stocks, particularly in the US.
Their "Barclays Equity Factor Insights: June" report highlights a preference for "Growth over Value in US" due to stronger earnings momentum in growth companies.
Value stocks did outperform in May, but Barclays downplays this as temporary, potentially caused by "weaker guidance from a few Growth stocks."
The report also emphasizes a preference for large-cap stocks in the US. This is due to large caps' "exposure to Quality and Sales/EPS Growth styles," which Barclays favors, along with the potential risk of rising interest rates impacting "more levered small caps."
The European market presents a different picture. Barclays is "Neutral on Value across both regions" but sees potential in European small caps.
"In the US, we remain Positive on large caps over small caps, whereas in Europe, we are more Positive on small caps," they wrote.
This is likely due to their "multi-decade low valuation" and expectations of interest rate cuts in the second half of the year, which would benefit smaller companies more than large ones.