Jefferies weighs in on how to play potential Ukraine-Russia ceasefire

Elementis

13/02/2025 10:32

** Ahead of Munich Security Conference starting on Friday,
Jefferies lays out its view on how to play a potential
Ukraine-Russia ceasefire
    ** "Whilst the finer details of what a settlement looks like
remain unknown, (...) any tangible newsflow suggesting a
resolution will be quickly priced in by markets," it says in a
Tuesday note
    ** It sees any initial negative reaction for aerospace and
defence names as a buying opportunity as Europe bulks up on its
defence; points to Babcock  BAB.L , BAE Systems  BAES.L , Thales
 TCFP.PA , Avon  AVON.L , Chemring  CHG.L  and Qinetiq  QQ.L  as
longer-term beneficiaries
    ** In building and construction space, it views companies
with Eastern European footprints as key beneficiaries, including
CRH  CRH.N , Heidelberg  HEIG.DE , Holcim  HOLN.S , Kingspan
 KSP.I , Saint-Gobain  SGOB.PA , Sika  SIKA.S  and Ferrovial
 FER.MC 
    ** It adds construction market suppliers are also likely to
see outsized benefits and those to monitor include Siemens
 SIEGn.DE , Schneider Electric  SCHN.PA , Prysmian  PRY.MI ,
Siemens Energy  ENR1n.DE , Vestas  VWS.CO , Daimler  DTGGe.DE 
and Volvo  VOLVb.ST 
    ** "Any improvement in European growth prospects will also
be positive for economic growth (and commodities), whilst
companies with residual operations in Ukraine/Russia should also
benefit" - Jefferies
    ** Thus, in the resources space, it says stocks to watch are
ArcelorMittal  MT.AS , Total  TTEF.PA , BP  BP.L , Saipem
 SPMI.MI , Subsea 7  SUBC.OL , TechnipFMC  1T1.F , BASF
 BASFn.DE , Stora Enso  STERV.HE , Billerud  BILL.ST , Victrex
 VCTX.L , Elementis  ELM.L , Synthomer  SYNTS.L  and Bodycote
 BOY.L 
    ** Among airlines it notes that Wizz Air  WIZZ.L  has the
greatest fleet capacity to and from the region, while in
airports, ADP  ADP.PA  and Fraport  FRAG.DE  will also likely
benefit as key transport hubs
    ** Since Ukraine/Russia produce critical materials for
semiconductors, better access would alleviate supply chain
concerns, Jefferies notes, adding that ASML  ASML.AS , Infineon
 IFXGn.DE  and STMicroelectronics  STMPA.PA  are likely
beneficiaries

 (Reporting by Anna Pruchnicka)
 ((anna.pruchnicka@tr.com))