50 companies to watch in 2023
This analysis is by Bloomberg Intelligence Strategist Tim Craighead. It appeared first on the Bloomberg Terminal.
Strong, differentiated fundamental views and catalysts in 2023 are the common threads connecting this set of 50 companies, which are largely a subset of our broader list of Focus Ideas. They span an 80% split between the US and Europe and 20% in Asia, across all sectors. We have constructive outlooks on 40 companies but are concerned for 10. Management changes, new product innovation, electric-vehicle acceleration, China’s re-opening, navigating inflation and tech supply chain prospects are among the list’s many themes.
See regional details below and explore our Focus Ideas and primers on the terminal at BI FOCUS <go> and Ticker BICO <go> for each company.
US ideas to watch: From Ebay and Netflix to Emerson and Cooper
TMT has its fair share of our US ideas, where we see new developments not yet reflected in depressed expectations, such as for Netflix, Microsoft, CrowdStrike and Disney. We also believe there’s further risk to consensus for Meta. Health care is represented with new advances for diabetes (Eli Lilly), cardiovascular disease (Medtronic) and vision (Cooper), but Amgen may miss on a key lung cancer drug.
In consumer sectors, the beverage business stands to offer refreshing outlooks with Constellation and Brown-Forman, and eBay’s new services look set to increase its “take” of revenue. For industrials, Emerson’s exposure to energy-sector automation looks positive, while Allison Transmission faces competition as trucks begin the shift to new drive systems.
European ideas for 2023: From Porsche and BNP to LVMH and Vestas
Within our European list, energy ideas are prominent. We believe Aker BP and Repsol may surprise with bigger payouts and Adnoc Distribution can enjoy better gas-station traffic. Vestas may also blow away wind turbine expectations in 2023. In financials, BNP looks well positioned to increase shareholder returns with better margins and asset sale proceeds, while Prudential’s new CEO will start just as China is reopening its border with Hong Kong, which is key to its business.
Across consumers, LVMH may also benefit from a China recovery and Porsche’s accelerating EV exposure looks set to pass current expectations. Ironically, we’re concerned about recession-related risks for Givaudan’s flavors and fragrances though we’re optimistic about Glencore’s coal and SSAB’s specialty steel. ASML is our sole European tech idea.
Asia ideas: Tech supply chain recovery, China reopening and more
A host of our Asia ideas have fallen prey to last year’s tech supply chain woes, but we see the chance of positive surprises for TSMC, MediaTek and Luxshare. China’s retreat from its Covid Zero policy could be a catalyst for Singapore Airlines, but we’re concerned it may disappoint hopes for Airports of Thailand. Similarly in property where policies are easing, we’re still worried about consensus for KE Holdings and Henderson Land.
Financials take us to Australia, where Suncorp’s dividend look set to rise and Computershare’s earnings may float higher with elevated global interest rates.
