Dutch tech giant ASML has been a favorite among investors in recent years, but Goldman Sachs has taken a cautious stance on the stock and removed it from its firm top list. This follows a “weak earnings update” in the third quarter, the investment bank analyst wrote in a Nov. 4 research note. ASML’s third-quarter net bookings were 2.6 billion euros ($2.79 billion), below Wall Street analysts’ forecast of 5.6 billion euros. However, net sales of 7.5 billion euros were higher than expected. ASML expects net sales in 2025 to be less than half of its previous forecast range of 30 billion euros and 35 billion euros. Against this backdrop, Goldman Sachs analysts noted that ASML has “low visibility of near-term earnings following its third-quarter update.” In addition to ASML, Goldman Sachs also removed beer maker Heineken and electronics giant Philips from the European conviction list in November, and updated Coca-Cola HBC (Greek Bottling Company) and JD Sports. The stocks appear on the investment bank’s “Conviction List – Director’s Cut,” which it says provides a “curated and active” list of Buy-rated stocks. Goldman Sachs said they were selected by a subcommittee in each region that “works with analysts in each industry to identify the best ideas that combine conviction, differentiated views and high risk-adjusted returns.” Coca-Cola HBC Goldman Sachs is optimistic about Coca-Cola HBC’s (also known as CCH) solid revenue and strong margin improvement. “CCH’s best-in-class execution and innovation pipeline, led by Coca-Cola, should drive volume growth and a positive mix,” the investment bank noted. CCH is Coca-Cola’s partner in bottling and selling its beverages. The company said organic revenue grew 13.9% in the third quarter, beating analysts’ forecasts of 10.8%. Full-year 2024 organic revenue is now expected to grow between 11% and 13%, compared with the previous forecast range of 8% to 12%. “It beat consensus by 2% and 1%, respectively, driven by his upbeat organic sales growth expectations on sales and a positive price mix,” the company said. He also expects CCH to have “continued positive earnings momentum.” CCH’s shares are listed on the London Stock Exchange and in the United States as American Depositary Receipts (ADRs) under the symbol CCHGY. Its shares have risen nearly 23.6% so far this year. Goldman Sachs has a 12-month price target of £30 ($41.31) on the stock, implying potential upside of 12.6%. JD Sports British sneaker and sports fashion retailer JD Sports is also on Goldman Sachs’ list. The investment bank noted that the stock currently trades at a “dismal” price-to-earnings ratio of 9.7x, but is “well-positioned for (a) sportswear recovery.” The comments come as “the sportswear industry is emerging from a challenging period, with inventories largely normalizing and high-frequency trackers indicating that after a period of deep discounting, retailers’ price-cutting activity has returned to the levels seen in 2019.” level”. This phenomenon, coupled with the continued improvement of each brand’s product line, prompted analyst Richard Edwards to take an “above consensus view” on JD.com’s LFL (like-for-like) sales growth. Edwards also expects space expansion and acquisitions to grow sales by an average of 10% from 2025 to 2027, above the 7% consensus average. JD Sports’ shares are listed on the London Stock Exchange and in the United States as American Depositary Receipts (ADRs) under the symbol JDSPY. Its shares have fallen nearly 24.2% so far this year. Goldman Sachs has a 12-month price target of £1.90 for the stock, implying a potential upside of nearly 50%. —CNBC’s Michael Bloom contributed to this report.
