JPMorgan has some new global stock picks to play the slowing recovery

Published Thu, Oct 7 202112:00 AM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at JPMorgan have named a raft of global stocks that they believe are set to do well as the economic recovery from the coronavirus pandemic slows. Their picks include stocks they consider good value, high growth or high quality. While JPMorgan said its European team has had a "positive view on equities, economic growth and higher inflation expectations alongside our colleagues since the summer of 2020," it is now more cautious, it said in a Sept. 29 research note. The economy has shifted from an "expansion" phase to a "slowdown," the analysts said, indicated by factors such as a reduction in confidence among German manufacturers and lower global earnings per share revisions, a key measure for investors. "The Slowdown phase of the cycle supports an overweight in sectors like Technology, Staples, Discretionary, and Health Care … And underweights in Financials, Energy, Communication Services, and Utilities," the analysts stated. In a list of "Top (long) Value Screen" stocks, JPMorgan named "inexpensive" names. A long position refers to an investment that is expected to increase in value over a period of time. The top stocks on the screen are French IT company Atos , German health care firm Fresenius , Telecom Italia and tobacco firm Imperial Brands . In a separate list, JPMorgan screened for "High Growth" stocks, which include Danish biotechnology firm Genmab , Swedish venture capital firm Kinnevik , parcel locker company InPost , drinks firm Remy Cointreau and Norwegian oil group Lundin Energy . In its "High Quality" screen, JPMorgan picked investment manager Hargreaves Lansdown , medical company Coloplast , consumer electronics firm Logitech , real estate business Partners Group and private equity firm EQT . Larger firms are also supported by a slowdown phase, the analysts said, and the bank picked food company Nestle , health care firms Roche and Novartis , luxury group LVMH and semiconductor supplier ASML . "We believe, extreme valuations should be avoided, but so too should those stocks with high variability in earnings and dividends as the profit revisions and macro inputs soften from their peak," the analysts added.

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