Consumer Discretionary

Report by Fighting Financials

The shares are not cheap, trading at a 4% FY25E FCF yield. However, this is for a company with significant long-term pricing power, a track record of double digit revenue growth and no debt. Consensus forecasts imply growth turns negative in H2, but Fighting Financials thinks this is unlikely and anticipates upgrades to FY numbers. Ultimately, they like the opportunity mainly as a hedge to a book of UK shorts. In FY24, only 22% of the group’s core revenues were UK-based, with 44% derived from North America. With the strong USD likely to persist, they see GAW as a rare example of quality and therefore a relative winner in an otherwise troubled and low-growth UK stock market.

Consumer Discretionary / Industrials

Report by Willis Welby

Willis Welby looks at UK growth names (>$2.5bn M/Cap) that have not shared in the share price rises since Oct 26th. CPG has seen analyst downgrades despite a robust update during Nov, but looks like a very strong compounding story that is not expensive and makes great sense at current prices. However, it is BAE that really stands out. The defence contractor has seen upgrades to consensus Y2 EBIT over the last three months and more recently has announced more good news on orders. Relative to US peers that implied to Y3 EBITM ratio of <60 looks way too low. Other stocks discussed in their report include AstraZeneca and Games Workshop.