Goldman says consider buying these stocks as Ukraine-Russia war hits the European economy

Published Wed, Mar 9 20224:16 PM ESTUpdated Wed, Mar 9 20225:02 PM EST

As the Ukraine-Russia conflict nears its second week, Goldman Sachs has laid out a strategy for investors who are worried about a weakening European economy. The biggest takeaway: Buy domestic stocks with low exposure to Europe. Forecasters weighing the economic impact of Russia's war on Ukraine think it's likely that the U.S. economy will slow as inflation rises. The outlook is less rosy for Europe. Economists think the region could be the brink of a recession, with Russia's economy likely to see the largest decline in GDP. Oil and some commodity prices have been volatile , as investors gauge the impact of sanctions that have been levied on Russia. As the war shows few signs that it will come to a resolution, Goldman Sachs sent two portfolios Monday to clients looking to play out a situation where Europe extends into economic disarray. One basket outlines U.S. stocks with high sales exposure to Europe, including Booking Holdings , eBay and Meta . The second portfolio includes companies with high domestic sales like Chipotle , Target and major telecom companies Verizon and AT & T . Here are some of the stocks that made those lists: Constellation Brands , a leading producer of beer, wine and spirits, makes just 3% of its sales outside the U.S., while 9% of telecom giant AT & T's sales occur abroad. Constellation's stock is flat this month, while AT & T shares are down more than 1%. Target shares are down 6% this year, but the stock has gained more than 8% this month after it shared an upbeat sales forecast with investors. Chipotle also made Goldman's list, and it has seen its stock plummet more than 19% year to date. Retailers with more global footprints have warned of potential business disruptions due to the conflict. Some are pausing operations in Russia. Others may face supply chain delays or higher costs for transportation and raw materials. Cigarette manufacturer Philip Morris , which has seen its stock drop 6% this month, opted to exit Russia, which combined with Ukraine represents one of its key markets. It has 49% of its sales exposed to Europe. Booking Holdings, which is banking on a return to leisure travel as the pandemic wanes, is among the companies with the highest sales exposure to Europe. The online travel company said Tuesday that room occupancy has taken a hit during the crisis in Ukraine, falling 10% compared with 2019 levels within the last week. Russia and Ukraine combined account for a low single-digit percentage of its bookings, the company also said. Booking Holdings has 77% of its sales exposed to Europe, according to Goldman Sachs. Its stock has fallen more than 5% this month. — CNBC's Michael Bloom contributed to this report.

In this photo illustration the Booking Holdings logo is seen displayed on a smartphone.

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As the Ukraine-Russia conflict nears its second week, Goldman Sachs has laid out a strategy for investors who are worried about a weakening European economy.