Consumer stocks poised for a recovery

Consumer Discretionary

AIR Capital

AIR expects a wave of upward revisions from European corporations in the coming months as tariff clouds thin, China stabilises, infrastructure spend ramps up and European rates remain low. The missing piece is consumer confidence, which should rebound quickly if geopolitical tensions ease. Consumer names like Inditex, Stellantis, LVMH, Diageo, Kering, Adidas, Nestle and Unilever look compelling after steep share price declines, with valuations back to decade-lows. Many of these firms are pursuing clear turnaround strategies focused on FCF generation, deep efficiency gains (utilising AI) and renewed focus on core businesses - supported by a trend toward insider CEO appointments, after a decade of appointing outsiders.

- 22 August, 2025

Prysmian (PRY IM) Italy

Industrials

Cerundolo Investment Research

Guy Cerundolo highlights 10 European long ideas scored and ranked using his multi-factor technical model. These stocks have good absolute and relative structure and either emerged or are starting to emerge from consolidation patterns from which he sees further upside. In addition to PRY (see chart), other companies highlighted include Inditex, MTU Aero Engines, Pandora, Rolls-Royce and Schneider Electric.

- 20 September, 2024

Expectations analysis for European Apparel & Branded Goods

Consumer Discretionary

Willis Welby

Revisions for stocks in this sector continue to improve with the median move in consensus Y2 EBIT over the last three months now an upgrade of 3.7%. These good revisions alongside recent share price weakness mean the implied to Y3 EBITM ratio has fallen back to 97. Moreover, consensus Y3 revenue growth of 7.5% is still a big premium and for most stocks should compound well for shareholders. In this report, Willis Welby focuses on the opportunity at Richemont, but also likes Inditex which has had very strong revisions post recent results as well as Moncler.

- 23 June, 2023

European & US short ideas

Vision Research

Since Vision pitched their short thesis on Vidrala, Verallia and O-I Glass at our Equity Shorting Conference in mid-Mar the stocks have underperformed the Stoxx600 by ~8%. In the last couple of months they have also initiated 3 new European shorts, 3 new US shorts, and has readied a new $7bn+ European short (trades ~$20m/day and has short interest of <1%) for initiation next week. Please join Vision for a meeting while members of their team are in Paris (Jun 5th-6th), Zurich (Jun 7th) and London (Jun 8th-12th).

In the last 24 months, Vision has closed several shorts including: Allegro, AutoStore, Boohoo, Burlington, Colruyt, De'Longhi, Electrolux, Gerresheimer, H&M, Hargreaves Lansdown, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC, UiPath and Whirlpool.

- 26 May, 2023

A new $3bn+ M/Cap European industrial short

Industrials

Vision Research

Trades >$10m/day and has <1% short interest - will be lapping price increases at a time when volumes have turned negative and there are substitution threats and declining per capita usage of products at some of its largest customers. It trades >10x EV/EBITDA on 2023 estimates that call for 40% growth in EBITDA.

In the last 24 months, Vision has closed several shorts including: Allegro, Boohoo, Colruyt, H&M, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC and UiPath.

- 17 February, 2023

Expectations analysis for European Apparel & Branded Goods

Consumer Discretionary

Willis Welby

Luxury Goods have had a reputation for being one of Europe’s growth areas for a long time and last month they performed well ahead of wider indices. Although the median implied to Y3 EBITM ratio of Willis Welby’s large cap universe is now 96, that still feels tenable given the generally high levels of financial productivity and the almost universal high levels of current and projected revenue growth. In this note, they focus on Cucinelli. While the company is currently on a roll, Willis Welby finds expectations ratios far too high and financial productivity too low. The likes of Kering, Inditex, Richemont and Moncler look far more appealing.

- 06 January, 2023

Inditex (ITX SM) Spain

Consumer Discretionary

Zara is looking better than ever; top European comeback play - Stacey Widlitz explains why she believes the Spring/Summer collection is perhaps the best of any brand right now (incorporating mom jeans colour, prints and the Pucci look). Its product is now appealing to a wider age group (teen to late 40s) and accessories are finally hitting their stride and still offer loads of potential. Stacey also reported that Zara has been one of the clear winners as the UK eased lockdown restrictions recently.

- 30 April, 2021