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Morgan Stanley reveals its 8 favourite shares forward of Europe’s earnings season – EAST AUTO NEWS

Morgan Stanley reveals its 8 favourite shares forward of Europe’s earnings season


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

Bing Guan | Bloomberg | Getty Photographs

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

Shares within the area have risen this yr on the primary indicators of moderating inflation throughout Europe. Nonetheless, the influence of sluggish progress and the battle in Ukraine stays key considerations for traders.

Listed here are the European shares that the Wall Road financial institution thinks will outperform, even because the broader market is prone to take a success on earnings.

Morgan Stanley’s 8 European inventory picks

Firm Ticker Earnings date Foreign money Share worth Value goal Upside (%)
Common Music GroupUMG-AMS02-MarEUR23.4335.0049.38
TeleperformanceTEP-PAR23-FebEUR252.10320.0026.93
SCORSCR-PAR09-FebEUR23.8330.0025.89
Elis SAELIS-PAR02-MarEUR15.7518.8019.37
SartoriusSRT-ETR26-JanEUR350.50415.0018.40
AccorAC-PAR08-MarEUR29.1934.0016.48
SAPSAP-ETR01-MarEUR106.58123.0015.41
Compass GroupCPG-LON26-JanGBP19.3222.0013.90

Supply: Morgan Stanley, Jan. 20

Here is what they needed to say about 4 shares from the above desk:

Common Music Group – Music distribution

UMG reported 13.3% natural progress and beat expectations final quarter. The corporate additionally named former CEO of Paramount Photos Sherry Lansing as chair earlier this yr.

Morgan Stanley says:

“We count on the inventory to rally into earnings, due in early March. We expect consensus forecasts for Subscription & Streaming income progress and margins in 2023 are too low and imagine FY’22 earnings will likely be a catalyst for a reassessment of each metrics by traders.”

Teleperformance – Outsourced buyer care

Teleperformance was investigated by the Colombian authorities after it was accused in a Time journal article of violating “the fitting to dignity, work and social safety in the direction of employees” who reasonable TikTok movies on the firm. Its personal inner audit recognized no vital adversarial findings.

Morgan Stanley says:

“Teleperformance shares have been underneath scrutiny since November following the outbreak of unfavourable information move round its Content material Moderation in Colombia. We proceed to take care of that these dangers have been overblown and underlying Teleperformance stays a effectively managed entity. Extra importantly none of this information move alters the elemental progress and earnings profile of the corporate.”

Elis – Outsourced laundry companies

Elis beat market expectations in its third quarter on income and mentioned there was no slowdown in demand throughout the 29 international locations it operates in. Following hovering power prices over the summer season, Elis additionally mentioned it had negotiated worth will increase with prospects that will kick in between Oct. 2022 and Jan. 2023.

Morgan Stanley says:

“Elis provides resilient GDP+ progress by the cycle, which is predicted to be structurally greater put up COVID (pushed by elevated demand for hygiene, reliability, accountability and ESG).”

Accor – French hospitality firm

Accor is implementing what it calls an “asset mild” technique in an effort to simplify its stability sheet. Final week, it bought a $460 million stake in China’s H World inns, which lowered its web debt. Following the asset disposal, Barclays fairness analysis workforce upgraded the inventory to a maintain.

Morgan Stanley says:

“We expect there’s a good tactical setup for Accor, with RevPAR [revenue per available room] information operating forward of FY23 consensus (+4%) and the sale of H World serving to to handle lingering considerations over operational and strategic focus.”

— CNBC’s Michael Bloom contributed reporting.

Morgan Stanley reveals its 8 favourite shares forward of Europe’s earnings season – EAST AUTO NEWS
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