Goldman Sachs has refreshed its European Conviction List for August 2026, inserting ASML, Sika and Puig and taking Schneider Electric and Knorr Bremse off the roster.
For ASML, analyst Alex Duval highlights a clearer line of sight on planned capacity increases following robust order intake across both the Logic and DRAM segments. Duval says Goldman Sachs' estimates for ASML sit 5% to 18% above consensus on earnings per share for fiscal years 2027 through 2029.
Duval projects a notable improvement in margins, forecasting a climb from roughly 41% in fiscal 2026 to about 50% by fiscal 2029. He attributes that potential expansion to a combination of pricing power, a mix shift toward higher-priced platforms, and operating leverage. Duval also cautions against categorizing ASML solely as an AI-driven company, noting that "over half of its revenue growth" is sourced outside AI and that the company benefits from "an increasingly broad customer base."
Switzerland-based Sika was added on the view that volumes are beginning to inflect. Analyst Ben Rada-Martin sees that uptick as sustainable, supported by a defensive mix of end markets including infrastructure, renovations and data centers. Rada-Martin also points to margin resilience, saying there is "downside protection on the margin side with pricing power even as raw material inflation eases," which underpins his forecast that is 5% ahead of consensus for fiscal 2027 EPS.
In the consumer space, Aron Adamski highlighted Puig as a conviction pick driven by innovation-led growth and what he describes as "the busiest launch pipelines it has ever had." Adamski notes structural opportunity within Puig's categories: while the women's fragrance market is nearly double the size of the men's segment, Puig's share stands at 8% in women’s versus 17% in men’s, leaving measurable "white space." He also points to growth potential in makeup and skincare, which together account for less than 30% of sales, and to Puig's low leverage, which provides "optionality for selective bolt-ons." Adamski expects operating leverage to support margin expansion, with upside if new launches match prior performance.
Context and implications
The updates reflect differing drivers across equipment, industrial materials and consumer discretionary sectors: ASML's case hinges on capital equipment demand and margin mechanics; Sika's outlook rests on volume recovery in defensive construction-related end markets and pricing power; Puig's thesis centers on product innovation and market share expansion within fragrances and beauty categories.
The bank removed Schneider Electric and Knorr Bremse from the list in the same update, narrowing the conviction set by replacing them with the three additions.