In terms of technology, it is projected that it is time for Europe to be a leader. This list includes stocks in various fields such as electric cars, drones and 3D printing.
There are six companies whose set of world-class innovations gives them long-term advantages over regional and global partners.
Here are the shares, all rated “overweight” by Morgan Stanley:
ASML – With a market capitalization of around € 240 billion ($ 286 billion), the Dutch company ASML is one of Europe’s most valuable technology companies. The company manufactures lithographic equipment that combines high-tech hardware and software to control the chip manufacturing process down to the nanometer level.
The lithography tools that ASML produces are key factors in the continued contraction of integrated circuits. ASML currently has about 90% of the global lithographic market, and Morgan Stanley estimates that demand for its equipment will increase as chips become smaller. The bank has a target share price of 590 euros.
Dassault Systems – French industrial software maker Dassault Systems is in the early stages of a major product cycle and is on track to launch new products in new industries. The company, which has a market capitalization of about 50 billion euros, is “well positioned” to cope with the digitalization of the manufacturing and healthcare industries following the acquisition of Medidata.
It is believed that the long-term / visionary approach of management to position the company for the future through internal research and development activities and strategic mergers and acquisitions further strengthens its position as a leader in innovation. The target price for the shares of Morgan Stanley is 187 euros.
Evolution Gaming – Founded in Sweden in 2006, Evolution is a casino game developer. The company develops, manufactures and licenses games, which are then hosted on its customers’ websites. As a dominant gaming provider, Evolution is well placed to take advantage of the casino’s structural change to online.
The company has a strong innovation culture. Evolution gaming innovation is projected to continue to expand its target market and maintain a healthy difference in competition, leading to high revenue growth that lasts longer. His shares are currently around SEK 1,477 and Morgan Stanley’s target price is SEK 1,750.
Ocado – The British e-commerce company Ocado operates an entirely online grocery retail operation. The company says it placed 325,000 orders per week in 2019 and has an active customer base of 795,000 people. Ocado is the company in the online food space with the most comprehensive and differentiated solutions for its customers.
Online groceries are the grocery channel that is growing the most, and given how underdeveloped it is, it is likely to continue over the next few years.
The company’s investment in robots that can find and package food distinguishes the company drastically from its competitors. Analysts’ target price was £ 28.13, while the stock was trading at £ 20.19.
Shop Apotheke – The Dutch-based Shop Apotheke makes money by selling over-the-counter medicines, beauty products and personal care products online. Morgan Stanley expects the company to benefit from an aging population and changing channels.
The pharmacy market in Western Europe is currently projected to cost 260 billion euros, 80% of which are prescription drugs (Rx). Yet the online penetration of Rx is still very low. However, regulatory changes are set to speed up the channel’s transition to online, with Germany at the heart of this opportunity, as listings (eRx) there will become mandatory by January 2022. The target price for Morgan Stanley shares is € 230.
Teleperformance – Teleperformance has long been a good growth campaign, with a healthy balance between new and existing customers and from different end markets.
Management’s ability to anticipate market changes means that Teleperformance is a leader in areas such as EV customer service charges and e-commerce relationships, which allows the company to stay ahead of its competitors. They gave the shares a target price of 370 euros, higher than Monday’s close of 346 euros.
The capital is flowing into European start-ups and there are now more than 100 companies in Europe worth more than $ 1 billion. However, the continent has not yet produced a technology giant on the same scale as Google or Apple in the United States, Alibaba in China or Samsung in South Korea.
European start-ups are directing more money than private capital than ever before, and it is predicted that while the US and China are seemingly more obvious thematic investment regions, European investors may benefit from the same topics at significantly cheaper estimates.
Junior Trader Nikolay Yordanov