Key points:
• European stocks rose for a seventh consecutive week on optimism that central banks will soon pivot to interest rate cuts. The Stoxx 600 remains in a Confirmed
Uptrend with three distribution days. Last week, it logged another strong performance, up 114bps, closing at a new all‐time high and holding on to its 10‐DMA
throughout the week. Leadership remains extended and technical indicators such as the 12‐week New High/New Low Ratio trade at an extreme. We recommend taking
gains in extended names (stock trading >20% from their recent base) and focus on leaders (RS line rising) that are breaking out of early‐stage bases.
• Sector rotation: change of regime? Sectors closed mostly in the green. For the second consecutive week, Utility led the gains while Transportation was the worst
performing group. On our rotation graph, Consumer Cyclical has been showing strong improvement in its short‐term momentum. Technology, which is in the best
quadrant, has shown a decline in its short‐term momentum (i.e. fading momentum). Capital Equipment is also in the best quadrant while its short‐term momentum has
been flat. Energy, Utility, Transportation, and Consumer Staple have shown a decline in their short‐term momentum.
• Sector Score Cards – Stocks of Interest (Top‐rated names with best technical set‐ups ‐ refer page 9–21):
• Basic Material: IMCD (IMCD.NL), Centamin (CEY.GB), Hill & Smith (HILS.GB).
• Consumer Cyclical: Moncler (MONC.IT).
• Consumer Staple: Cranswick (CWK.GB).
• Energy: Rubis (RUI.FR).
• Financial: Banco Santander (SAN.ES), UBS Group (UBSG.CH), Jyske Bank (JYS.DK).
• Retail: D’Ieteren Group (DIE.BE).
• Technology: Esker (ALEK.FR).
• Utility: Acea (ACE.IT).
• European Focus List Update:
• Actionable names include Banco Bpm (BP.IT; BAMI IM), Wise (WISE.GB; WISE LN), Sage Group (SGE.GB; SGE LN), Flutter Entertainment (FLTR.GB; FLTR LN),
Technogym (TGYM.IT, TGYM IG).
• Addition: None.
• Removal: None.
Author: Tristan d'Aboville
Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product.
Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings.
Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson.
Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA).
A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.
Consumer Discretionary
Key Points
• The U.S. online sports betting (OSB) and iGaming industry has witnessed strong growth since the U.S. Supreme Court
removed a federal ban on sports betting in 2018, gaining market share from the land‐based gaming sector. Driven
by favorable regulations, the ~$15B online gaming industry (including iGaming and OSB) is expected to reach a TAM of $40B
by 2030 (a 15% CAGR) as key players explore untapped consumer segments and demographics.
• Until 2023, growth of this nascent industry had been made at the expense of profitability as key leaders invested massively in
technology and customer acquisition to consolidate their market share. The three largest players – FanDuel (owned by
Flutter Entertainment), DraftKings, and BetMGM (a 50/50 joint venture between MGM and Entain) – now own more than
70% of the market and have recorded a cumulative EBITDA loss of $2B+ in 2022.
• We believe the sector is currently entering into a new cycle, where key operators should start to reap the benefits of
their past investments:
• In 2022, FanDuel was the first U.S. online sportsbook to generate profit.
• In 2023, BetMGM and Caesars Entertainment’s digital segment reported their first positive EBITDA in Q2.
• DraftKings is expected to turn profitable at the EBITDA level this year.
• On average, the sector is expected to deliver EBITDA CAGR of more than 20% in 2024–2026 and deliver an EBITDA margin of
25–30% by 2026.
European Weekly Summary
Key points:
European markets ended at new highs for the second consecutive week. Technical action on the Stoxx 600 was flat for most of the week, but the
index bounced off its 10-DMA on Friday to make fresh 52-week highs. ETFs, such as EWG, EWI, and EZU, continue to hold upward momentum as
seen last week. We recommend that investors add risk in leading industry groups breaking out of proper bases with strong and rising RS lines.
Sectors were mixed. Capital Equipment, Technology, Energy, and Financial led the gains, while Transportation and Consumer Staple led the
decline. On our rotation graph, Cyclical has been showing strong improvement in its short-term momentum. Technology has been leading the pack
and is in the best quadrant but has taken a pause in its short-term momentum. Capital Equipment is also showing rising short-term momentum as
opposed to Energy and Utility.
Sector Score Cards – Top-rated names with best technical setups:
o Consumer Cyclical: Jungfraubahn (JFN.CH).
o Financials: CaixaBank (CABK.ES), Wise (WISE.GB).
o Technology: Fortnox (FORT.SE).
o Transportation: Clarckson (CKN.GB).
European Focus List Update:
o Actionable names include Sage Group (SGE.GB), Flutter Entertainment (FLTR.GB), Trigano (TRI.FR), Straumann (STMN.CH), Banco Bpm
(BP.IT), Vat Group (VACN.CH), TBC Bank (TBCG.GB), and Wise (WISE.GB).
o Addition: Sage Group (SGE.GB).
o Removal: None.
European Weekly Summary
Key points:
• European markets have closed in the green for five consecutive weeks. European markets joined the U.S. indices last week in making fresh all‐time highs. Earnings
season and sentiments on rate cuts have fueled the markets. Index ETFs such as EZU, EWG, and EWI are breaking out.
• We recommend adding risk in leading industry groups that are breaking out of proper bases with strong and rising RS lines.
• All sectors closed in positive territory, other than Energy, which declined marginally. Consumer Cyclical, Retail, Capital Equipment, and Financials led the gains. On
our rotation graph, Technology is leading the pack. Consumer Cyclical and Capital Equipment are also showing improvement in short‐term momentum. Energy,
Utility, and Transportation are showing a decline in their short‐term momentum.
• Sector Score Cards – Top‐rated names breaking out of consolidations:
o Basic Material: Air Liquide (AIRS.FR).
o Capital Equipment: Fugro (FUR.NL), Halma (HLMA.GB).
o Consumer: Evolution Gaming (EVOG.SE), Flutter Entertainment (FLTR.GB).
o Financial: EQT (EQT.SE), Bper Banca (BPE.IT), Tbc Bank Group (TBCG.GB).
o Technology: Sage Group (SGE.GB).
• European Focus List Update:
o Actionable names include Evolution (EVOG.SE; EVO SS), Eqt (EQT.SE; EQT SS), Banco Bpm (BP.IT; BAMI IM), Trigano (TRI.FR; TRI FP), Technogym
(TGYM.IT; TGYM IM), Universal Music Group (UNMG.NL; UMG NA), Straumann Hldg. (STMN.CH; STMN SW), Flutter Entertainment (FLTR.GB; FLTR LN),
Vat Group (VACN.CH; VACN SW).
o Addition: Evolution (EVOG.SE; EVO SS), Eqt (EQT.SE; EQT SS).
o Removal: None.
European Weekly Summary
Key points:
• European markets had a strong last week, bouncing off their 21-DMA. This comes after two consecutive weeks of consolidation. The Stoxx 600 closed
0.7% shy of its all-time highs. Eight of the 16 indices are in a Confirmed Uptrend. We recommend adding risk in leading industry groups that are
breaking out of proper bases with strong and rising RS lines.
• Sectors: Most sectors closed in positive territory. Basic Material, Capital Equipment, and Financials led the gains. Transport and Technology ended flat.
On our rotation graph, Technology is leading the pack. Consumer Cyclical is also showing improvement in short-term momentum. Basic Materials,
Utility, and Energy, and are showing a decline in their short-term momentum.
• Sector Score Cards – Top-rated names breaking out of consolidation (refer to page 9 to 21: Ssab B (SSBF.SE), Mowi (MHG.NO), Sydbank (SYD.DK),
Volvo (VOBF.SE), Breedon Group (BREE.GB)
• European Focus List Update:
o Actionable names include Flutter Entertainment (FLTR.GB; FLTR LN), Vat Group (VACN.CH; VACN SW), Technogym (TGYM.IT; TGYM IM), Rolls-
Royce Holdings (RR.GB, RR/ LN), Straumann Hldg. (STMN.CH, STMN SW), Universal Music Group (UNMG.NL, UMG NA), Ferrari (Mil) (RACE.IT,
RACE IM), Nemetschek (Xet) (NEMX.DE, NEM GR), Hermes Intl. (RMS.FR, RMS FP), Recordati Indua.Chimica (REC.IT, REC IM)
o Addition: Flutter Entertainment (FLTR.GB), Technogym (TGYM.IT)
o Removal: None
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index has reclaimed most of its key moving averages and is testing support at its 200-DMA. A decisive break above the $75 price level should be bullish for the sector. However, it continues to lag the broader market, with the RS line remaining in a downtrend with weak technical ratings.
European Weekly Summary
Key points (please refer to the report attached):
- European markets had another flattish week. The markets took a pause for the second week, with marginal moves on a weekly basis. Corporate earnings were mixed last week. We recommend that investors add risk in stocks in leading industry groups that are breaking out of proper bases with strong and rising RS lines.
- Sectors closed mixed. Technology and Consumer Cyclical led the gains, while Utility and Transportation declined the most. On our rotation graph, Technology is leading the pack. Consumer Cyclical is also showing improvement in short-term momentum. Retail, Basic Materials, Utility, and Energy are showing a decline in their short-term momentum.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index reclaimed its 200-DMA after consolidating just below it for some time. During the week, it had a
strong move gaining more than 2% on high volume. However, it continues to lag the broader market, with RS line remaining in a
downtrend with weak technical ratings. Since then it has traced back to its rising 10-DMA.The next major resistance is around its $75
price level which it reached back in June/July 2023.
European Weekly Summary
Key points:
• European markets had
a flattish week. The markets took
a pause last week, with marginal moves on
a weekly close‐to‐close basis. The indices are pulling
back to their short‐term moving averages post their rally in January.
• Most sectors closed in the green. Technology and Consumer Cyclical led the gains, while Transportation led the decline. On our rotation graph, Technology
is leading the pack, showing improvement in short‐term momentum. Retail, Basic Materials, Utility, Consumer Cyclical, and Energy are showing
a decline in
their short‐term momentum.
• Sector Score Cards
– Top‐rated names with best technical setup:
• Capital Equipment: Indutrade (INDT.SE)
• Consumer Staple: Glanbia (GL9.IE)
• Consumer Cyclical: Stellantis (STL.IT)
• Financial: Ringkjobing Landbobank (RIL.DK), Spar Nord Bank (SNB.DK)
• Technology: Softcat (SCT.GB), Alten (ALTE.FR)
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index, after consolidating just below its 200-DMA, has finally reclaimed it, though volume has been low. However, it continues to lag the broader market, with the RS line remaining in a downtrend with weak technical ratings. The next major resistance is around the $75 price level, which it reached in June/July 2023.
