Morgan Stanley Reveals Its 8 Favourite Shares Forward of European Earnings Season

Common Music Group’s working headquarters in Santa Monica, California.

Bing Guan | Bloomberg | Getty Photos

Morgan Stanley has named eight shares to purchase forward of a extremely anticipated earnings season in Europe.

Equities within the area have risen this 12 months on the primary indicators of moderating inflation in Europe. However, the influence of anemic development and the struggle in Ukraine stays a significant concern for buyers.

Listed here are the European shares that the Wall Avenue financial institution says will outperform, even when the broader market dangers hurting earnings.

The 8 European shares of Morgan Stanley

Firm Teleprinter Incomes date Forex Share value Value goal Up (%)
Common Music Group UMG-AMS 02-mar USD 11:43 p.m. 35.00 49.38
Teleperformance PET-PAR 23-Feb USD 252.10 320.00 26.93
SCOR SCR-PAR 09-Feb USD 23.83 30.00 25.89
Elissa ELIS-PAR 02-mar USD 15.75 18.80 7:37 p.m.
Sartorius ETR-SRT 26-Jan. USD 350.50 415.00 6:40 p.m.
Accor AC-PAR 08-mar USD 29.19 34.00 16.48
SAP SAP-ETR 01-mar USD 106.58 123.00 3:41 p.m.
Compass Group LON-GC 26-Jan. GBP 7:32 p.m. 10:00 p.m. 13.90

Supply: Morgan Stanley, January 20

This is what they needed to say about 4 shares within the desk above:

Common Music Group – Music Distribution

UMG recorded natural development of 13.3% and exceeded expectations within the final quarter. The corporate additionally named Sherry Lansing, former CEO of Paramount Footage, president earlier this 12 months.

Morgan Stanley says:

“We count on the inventory to show into earnings, anticipated in early March. Fiscal 22 might be a catalyst for a reassessment of each metrics by buyers.”

Teleperformance – Outsourced customer support

Teleperformance was investigated by the Colombian authorities after being accused in a Time journal article of violating “the suitable to dignity, work and social safety of employees” who reasonable TikTok movies within the firm. Its personal inner audit didn’t determine any materials antagonistic findings.

Morgan Stanley says:

“Teleperformance shares have been underneath scrutiny since November following the emergence of adverse information circulation round its content material moderation in Colombia. We proceed to argue that these dangers had been overblown and that underlying Teleperformance stays a well-run entity. Extra importantly, none of those data flows alter the basic development and earnings profile of the enterprise.”

Elis – Outsourced laundry companies

Elis beat market expectations in its third quarter when it comes to income and stated there was no slowdown in demand within the 29 nations by which it operates. 2022 and January 2023.

Morgan Stanley says:

“Elis delivers resilient GDP+ development all through the cycle, which is predicted to be structurally larger post-COVID (pushed by elevated demand for hygiene, reliability, duty and ESG).”

Accor – French resort firm

Accor implements what it calls an “asset mild” technique in an effort to simplify its steadiness sheet. Final week, he offered a $460 million stake in Chinese language inns H World, which decreased his internet debt. Following the asset sale, Barclays’ fairness analysis crew upgraded the inventory.

Morgan Stanley says:

“We imagine there’s a good tactical setup for Accor, with RevPAR [revenue per available room] knowledge forward of the FY23 consensus (+4%) and the sale of H World serving to to deal with lingering issues about operational and strategic path.”

– CNBC’s Michael Bloom contributed reporting.