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2022/12/19 / Erste Group Research

Health Care and Consumer Staples equities preferred in 1Q23

The forecasts for sales and earnings growth of the companies in the World Share Index have recently improved slightly for 2023. Sales should increase by +2.0% (y/y) in 2023 and profits should remain stable (2023e: +0.5% y/y). The expected operating margin should be 17% next year and remain at the level of 2022.

Meanwhile, the latest data from companies in the U.S. and Europe show a mixed picture. In the eurozone, the flash composite purchasing managers' index (EMI) improved from 47.8 to 48.8 in December. The German Ifo index also rose in December. The good news was that business input costs rose at the slowest pace in a year and a half. In the U.S., however, the Flash December EMI fell from 46.4 to 44.6 points. The survey showed the sharpest decline in new orders since May 2020, with weakness in the industrial sector more pronounced than in services. For this reason, among others, we continue to recommend particularly defensive stocks from the healthcare and consumer staples sectors.

Coverage terminated: Atlassian Dow Inc, E.ON, Ecolab, EDP, Geberit, General Electric, Partners Group, Paypal Holdings, Sika, SVB Financial Group, Vodafone.

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General information

AuthorErste Group Research
Product nameRecommendation List
Topic in focusEquities
Economy in focusEurozone, Germany, Switzerland, United Kingdom, United States
Currency in focusBritish Pound, Euro, Swiss Franc, US Dollar
Sector in focusAutomobiles & Parts, Banks, Basic Resources, Chemicals, Construction & Material, Financial Services, Food & Beverage, Health Care, Industrial Goods & Services, Insurance, Media, Oil & Gas, Personal & Household Goods, Retail, Technology, Telecommunications, Travel & Leisure, Utilities