Analysts at Goldman Sachs have tipped a group of stocks to take off as Europe emerges from widespread Covid-19 lockdowns.
The analysts tracked data from across Europe to gauge international and domestic levels of economic activity. This included flight searches, airport traffic, road traffic, restaurant bookings, retail sales and ATM transaction values.
Goldman said that the week ending 9 May had shown the greatest increase in activity in the year-to-date across Europe.
Average activity levels were still 51% below their pre-Covid baseline, but were 6 percentage points closer to normal levels than the 57% recorded the previous week.
The analysts said this was driven by an uptick in domestic activity, particularly in France, which began its four-phase reopening on 3 May.
Domestic stocks geared towards a European reopening have so far fared better than stocks that would benefit from a resumption in international travel, but international stocks have started to close the gap, the note from Goldman analyst Patrick Creuset said.
The analysis also found that UK domestic stocks had not delivered a significantly greater performance than EU domestic stocks, despite that UK’s speedy vaccine rollout and reopening,
Domestic-focused businesses that may see a nearer-term recovery include hospitality business Whitbread, clothes retailer H&M, contract caterer Elior and drinks company Pernod.
For those willing to take a slightly longer-term view, the analysts highlighted internationally-focused stocks such as airline maker Airbus, watchmaker Swatch and travel technology group Amadeus IT.
The analysts also spotlighted “laggards with significant upside potential”, which included sportswear company Adidas, engine-maker Rolls-Royce and drinks bottler Coca-Cola HBC.
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