ATX at Record Levels: How Much Potential Does the Austrian Stock Market Still Have?

For a long time, the Austrian stock market was considered undervalued, but it tended to be overshadowed by larger markets among international investors. The picture has since changed significantly: Following strong performance last year, the domestic benchmark index, the ATX 2026, has gained nearly 30 percent so far this year and reached new all-time highs.

A look at the long-term trend shows that the ATX has largely moved in tandem with other European stock indices. Recently, however, the pace of growth has accelerated, allowing the leading Austrian index to significantly outperform the DAX and the Euro Stoxx 50. It’s also important to note that the DAX is a total return index, meaning it includes dividend payments. This is not the case for the ATX and the Euro Stoxx 50. The difference would therefore be even greater.

And this is despite the fact that the Austrian economy continues to grow only modestly and many companies are facing high energy prices, geopolitical uncertainties, and a weak industrial economy. Has the Vienna Stock Exchange simply completed a long-overdue rebound – or is there more to this development? We spoke with Bernhard Haas, fund manager of ERSTE STOCK VIENNA, about this.

A year ago, the ATX had already outperformed many international stock indices. Were you surprised by its strong performance in 2026?

A second year of such significant outperformance is certainly a bit of a surprise. In the past, the “fat years” were often followed by a few lean ones. The fact that things turned out differently this time is primarily due to the index heavyweights. The banks are reporting excellent results, OMV is benefiting from higher energy prices, and Andritz and voestalpine are also performing better than economic data would suggest. Among other factors, the companies’ strong market positions are paying off here.

Was the stock price performance primarily a catch-up rally, or have the companies’ fundamental prospects improved?

The positive performance was driven primarily by better corporate earnings. In terms of valuation – as measured, for example, by the price-to-earnings ratio – not much has changed overall. So stock prices have risen mainly because companies are earning more.

Austrian stocks have long been considered undervalued. Is that still true after the sharp rise in stock prices?

Compared to other stock indices, the Austrian market remains relatively undervalued. However, this is also due to the high weighting of financial stocks, which typically trade at lower valuation multiples. If you compare banks with banks and industrial stocks with industrial stocks, the valuation discount on Austrian stocks has narrowed significantly over the past year. However, there are still individual stocks with attractive valuations. Today, you have to be more selective and look more closely.

How important is the Austrian economy to companies in the ATX these days, anyway?

A large proportion of ATX companies generate the majority of their revenue internationally, that is, outside of Austria. The domestic economy therefore plays a secondary role for many companies – otherwise, the currently strong corporate earnings would hardly be possible. However, constructive signals from policymakers regarding the Austrian labor and capital markets would be important. Special taxes, such as those imposed on energy companies and, to some extent, the banking sector, can deter international investors and harm the capital market in the long term – even if there may be other arguments in favor of such measures from a political perspective.

Where do you currently see the biggest positive and negative surprises among companies?

The banks are consistently posting solid results – both Erste Group and RBI, which are more focused on Central and Eastern Europe, and BAWAG, which has a stronger western orientation. In the oil and gas sector, OMV and SBO have also delivered positive surprises. The situation is more challenging for utilities, where water shortages, among other factors, are weighing on electricity production. Economic prospects also remain subdued in the automotive sector and in some industrial niches.

Can the announced infrastructure push in Germany and Europe give Austrian industry a new boost?

This could become very important for numerous Austrian industrial companies. While the domestic export industry remains heavily dependent on the German automotive industry, which is only slowly overcoming its challenges, we are seeing positive signs in sectors such as aviation and infrastructure. Companies such as voestalpine, AMAG, FACC, Strabag, and Porr, among others, could benefit from this. However, large infrastructure projects often have long lead times. The first major contracts could be awarded in 2027 – but the stock markets might anticipate such a development even sooner.

Following the strong price performance: How are you currently positioning the ERSTE STOCK VIENNA fund?

Our main focus remains on individual growth stories that are as independent as possible from the general economic cycle. One example is DO & CO. The company should be able to continue growing thanks to its strong position in premium catering – largely regardless of whether interest rates are slightly higher or lower next year. We remain cautious, however, regarding utilities. There could still be negative surprises here in the second half of the year, especially if the water shortage persists. In general, higher energy prices pose a risk to the Austrian economy and many companies. If this leads to a permanent rise in inflation and transportation costs, it could also limit the central banks’ room for maneuver and weigh on growth. It will therefore be crucial to determine how sustainable the current elevated level of energy prices is.

 

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