Jefferies names 2023 mid-cap picks ahead of 'year of recovery'

Interroll Holding AG

11/01/2023 09:57

** Jefferies sees European small- and mid-cap (SMID) stocks
recovering in 2023, saying these stocks "almost always lead the
market on the way up, well before recessions end"
    ** The broker believes high-quality companies, good pricing
power and solid balance sheets will remain in focus through
2023, preferring names like D'Ieteren  IETB.BR , Bechtle
 BC8G.DE , Mips  MIPS.ST  and CTS Eventim  EVDG.DE 
    ** It sees underlying demand structures offering attractive
options amid uncertainties for defensive names IMCD  IMCD.AS 
and Vimian  VIMIAN.ST 
        ** Jefferies also looks for companies with catalysts to
rebuild market sentiment, such as businesses ahead of a
regulatory pivot or those with strong pent-up demand; it favours
ShopApotheke  SAEG.DE , Do&Co  DOCO.VI  and Nagarro  NA9n.DE 
    ** Easing supply bottlenecks will help some companies to
work off backlogs and support cash generation, it says,
highlighting Nordex  NDXG.DE , AT&S  ATSV.VI  and Bechtle
    ** Stocks with a sustainable energy solutions angle will
benefit from Europe's push to cut dependence on fossil fuels,
the broker adds, naming Aalberts  AALB.AS , Meyer Burger
 MBTN.S  and Nordex, as well as SMA  S92G.DE  that it upgrades
to "buy"
    ** On the negative side, Jefferies cuts Alfen  ALFEN.AS ,
Interroll  INRN.S , Draegerwerke  DRWG.DE  and Pfeiffer Vacuum
 PV.DE  to "underperform" from "hold", and SkiStar  SKISb.ST  to
"hold" from "buy"
 (Reporting by Dina Kartit)
 ((dina.kartit@thomsonreuters.com))