Barclays sees headwinds waning for European small & mid cap in 2023

Tomra Systems ASA

02/03/2023 12:19

** Barclays starts coverage of European small- and mid-cap
(SMID) stocks, saying that while in 2022 the small caps were
impacted by a slowing economy and high initial multiples, it
sees both these headwinds waning in 2023
    ** Global macro trends, especially inflation, will likely be
more volatile over the next few years, meaning that investors
will have to increasingly rely on stock picking, the broker says
    ** By focusing on near-term stock drivers but within the
paradigm of a long-term investing framework, investors can
create substantial securities that generate excess returns,
especially in high-growth and deep-value investment
opportunities, it says 
    ** The brokerage initiates Norwegian sustainable technology
company Tomra Systems  TOM.OL , Belgian car distributor
D’Ieteren  IETB.BR  with "overweight" rating 
    ** It sees the companies as two high-growth opportunities
that are levered to two distinct trends: circular economy and
autonomous vehicles
    ** Barclays expects Tomra to be the highest-growth European
capital goods company over the next few years
    ** It sees D’Ieteren to be a beneficiary of the advanced
driver assistance system (ADAS) trend due to its 50.01% stake in
Belron, it says
    ** The broker keeps "overweight" on Logista  LOG.MC , Haypp
 HAYPP.ST  , and "underweight" on Scandinavian Tobacco Group
 STOGR.CO 

 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))