Dutch tech behemoth ASML has been a favorite among investors in recent years, but Goldman Sachs has adopted a cautious stance on the stock and removed it from its conviction list of top picks. This follows a “weak earnings update” in the third quarter, the investment bank’s analysts wrote in a Nov. 4 research note. ASML’s net bookings for the third quarter were 2.6 billion euros ($2.79 billion), below the 5.6 billion euros penciled in by Wall Street analysts. Net sales, however, came in higher than expectations at 7.5 billion euros. ASML expects net sales for 2025 to come in at the lower of half of the 30 billion euros and 35 billion euros range it previously predicted. Against this backdrop, Goldman’s analysts noted that “visibility on near-term earnings is lower post the 3Q update,” for ASML. Besides ASML, Goldman also removed brewer Heineken and electronics giant Philips from its Europe conviction list for November, and refreshed it by adding Coca-Cola HBC (Hellenic Bottling Company) and JD Sports . The stocks are featured in the investment bank’s “Conviction List – Directors’ Cut,” which it says offers a “curated and active” list of buy-rated stocks. They are selected by a subcommittee in each region which “collaborate with each sector analyst to identify top ideas that offer a combination of conviction, a differentiated view and high risk-adjusted returns,” Goldman Sachs says. Coca-Cola HBC Goldman is betting on Coca-Cola HBC, also known as CCH, given its solid top-lines and strong margin uplift. “CCH’s best-in-class execution and innovation pipeline led by Coca-Cola should drive volume growth and positive mix,” the investment bank noted. CCH is a partner of Coca-Cola and bottles and sells its beverages. The company said its organic revenue was up 13.9% in the third quarter , exceeding the 10.8% penciled by analysts. It now expects organic revenue growth between 11% and 13%, compared with a previous forecast range of 8% to 12%, for the full-year 2024. Analyst Olivier Nicolai expects the company’s full-year 2024 and full-year 2025 sales to exceed consensus by 2% and 1% respectively “driven by his bullish organic sales growth expectations on volume and positive price-mix.” He is also expecting the CCH to have “continued positive earnings momentum.” Shares of CCH are listed on the London Stock Exchange and as an American Depositary Receipt (ADR) in the U.S. under the CCHGY ticker. Its shares are up nearly 23.6% year-to-date. Goldman has a 12-month target price of £30 ($41.31) on the stock, implying a 12.6% potential upside. JD Sports Also on Goldman’s list is British sneaker and sports fashion retailer JD Sports . The stock is now trading at a “depressed multiple” of 9.7 times price-to-earnings, but is “well-positioned for [a] sportswear recovery,” the investment bank noted. The comments come as the “sportswear industry is emerging out of a challenging period, with inventory normalization largely done and high-frequency trackers pointing to retailer markdown activity back in-line with 2019 levels, following a period of elevated discounting” it wrote. This phenomenon — coupled with an improving product pipeline across brands — has pushed analyst Richard Edwards to an “above consensus view” on JD’s LFL (like-for-like) sales growth. Edwards also expects space expansion and acquisitions to contribute to an average 10% sales growth from 2025 to 2027, above the consensus average of 7%. Shares of JD Sports are listed on the London Stock Exchange and as an ADR in the U.S. under the JDSPY ticker. Its shares are down nearly 24.2% year-to-date. Goldman has a 12-month target price of £1.90 on the stock, implying nearly 50% potential upside. — CNBC’s Michael Bloom contributed to this report.
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