Europe
Jefferies’ View on Potential Ukraine-Russia Ceasefire
• Jefferies predicts a quick pricing in of any newsflow suggesting a resolution, despite the details of the settlement being unknown.
• It sees initial negative reactions for aerospace and defense names as a buying opportunity as Europe bulks up on its defense.
• Companies with Eastern European footprints are key beneficiaries in the building and construction space, including CRH, Heidelberg HEI, Holcim HOLN, Kingspan KRXI, Saint-Gobain SGO, Sika SIKA, and Ferrovial FER.
• Construction market suppliers are likely to see outsized benefits, including Siemens SIE, Schneider Electric SU, Prysmian PRY, Siemens Energy ENR, Vestas VWS, Daimler DTG, and Volvo VOLV_A.
• Jefferies also notes that any improvement in European growth prospects will also be positive for economic growth and commodities.
• In the resources space, stocks to watch include ArcelorMittal MT, Total TTE, BP BP, Saipem SPM, Subsea 7 SUBC, TechnipFMC FTI, BASF BAS, Stora Enso STEAV, Billerud BILL, Victrex VCT, Elementis ELM, Synthomer SYNT, and Bodycote BOY.
• Wizz Air WIZZ has the greatest fleet capacity to and from the region, and ADP ADP and Fraport FRA will likely benefit as key transport hubs.
• ASML ASML, Infineon IFX and STMicroelectronics STMPA are likely beneficiaries due to better access to critical semiconductor materials produced by Ukraine/Russia.
