Today, Goldman Sachs released the May edition of its “European Conviction List – Director’s Cut” report, revealing the company’s new additions of top buy stocks for the region.
More specifically, the banking giant’s equity analysts added London Stock Exchange Group (LON:), Neste, Saint-Gobain and Zealand Pharma (NASDAQ:) on their coveted list, while German auto giant Mercedes was removed.
Regarding LSEG, Goldman Sachs analysts “see that LSEG’s product differentiation and pricing power are driving above-consensus revenue growth, which, coupled with a decline in investment intensity, supports an increase in generation of FCF, which in turn should result in multiple revaluation,” the note writes. .
Meanwhile, analysts are growing increasingly bullish on Neste, a Finland-based oil refiner, saying they expect the company to lead the global oil fuel market. sustainable aviation (SAF) over the next 2-3 years.
This dominance should maintain SAF’s robust margins and support their forecast of +12% above consensus EBITDA in 2025.
For manufacturer Sant-Gobain, Goldman Sachs highlighted that the stock continues to trade at a lower multiple than its global peers despite strong price performance, reflecting investor skepticism about the sustainability of its margins.
“However, analysts say that margin improvements (via portfolio turnover, cost reductions) are structural, in addition to the rise of a volume inflection from 2025E and an improvement in price dynamics -cost,” the note continues.
Finally, the latest addition to the bank’s Director’s Cut list was the Danish pharmaceutical company Zealand Pharma, which, despite its recovery since the beginning of the year, could see a further rise “given that the company is one of the main beneficiaries of the growing anti-obesity drug market. which remains sufficiently important for several players,” wrote Goldman Sachs analysts.
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Analysts point to several key clinical trial catalysts for the stock this year, including the next petrelintide readout expected in the second quarter of 2024.
This trial “has the potential to show differentiation in tolerability and additional benefits compared to competing drugs,” Goldman Sachs said in the note.
