Europe’s stocks have suffered devastating declines in recent weeks as the spread of the coronavirus has seen everyday life in the region come to a near halt.
Those with most to lose, including operators of airlines, cruise ships, restaurants, retailers, bookmakers, cinemas, hotels and gyms, have been among the worst hit.
Yet there have been bright spots with grocery providers, telecommunications firms and gaming companies among those to benefit as many people are confined to their homes.
Here are some of the hardest-hit losers and the smattering of gainers from the recent turmoil.
The Stoxx 600 Travel & Leisure index has fallen 50% in 2020, with the worst hit being cruises firm Carnival Plc, down 76%. Airlines EasyJet Plc, British Airways-owner International Consolidated Airlines Group SA and Air France-KLM have all plunged and are seeking state aid.
Among airport owners, France’s Aeroports de Paris and Germany’s Fraport AG are both down more than 40% year-to-date as traffic through their respective hubs is squeezed. Swiss duty-free shop operator Dufry AG has slid 72%, with similar declines for U.K. travel concessions operator SSP Group Plc and WH Smith Plc, a retailer with many sites in train stations and airports. The same has been true for car rental companies Europcar Mobility Group SA and Sixt SE.
Hotel operators InterContinental Hotels Group Plc and Whitbread Plc have both lost about half their value. On Friday, IHG said the demand for hotels is currently at the lowest levels it has ever seen. France’s Elis SA, a supplier of linens to hotels and restaurants, has dropped even more.
Cineworld Group Plc, the U.K.-based cinema chain which also owns theaters in eastern Europe and the Regal brand in the U.S., has fallen 77% as major movie releases are delayed and investors fret about the debt it took on in the Regal deal and that it will take on to buy Canada’s Cineplex.
The gym sector is suffering too. Dutch chain Basic-Fit NV has had to close all its sites temporarily, while the U.K.’s low-cost chain Gym Group Plc has put its expansion plans on ice. Shares of both have fallen more than 60%.
High street branches of bookmakers have been hit too, and the mass cancelation of sporting events has left gamblers with limited options to place a bet online. William Hill Plc is down 79% with Ladbrokes-owner GVC Holdings Plc also sinking.
The act of visiting a restaurant or pub has also been restricted heavily. Restaurant Group Plc, owner of the Wagamama chain, has fallen 85%, with eating and pub chain Mitchells & Butlers Plc not too far behind. Pure-play pub firms Marston’s Plc and JD Wetherspoon Plc have fallen 78% and 58%, respectively.
Retailers across Europe have been suffering the consequences of people staying home, with clothing merchants like Inditex SA, Hennes & Mauritz AB and Next Plc all down by around a third or more. Sports clothing retailer JD Sports Fashion Plc, a star performer in recent years, is down 55% and this week touched the lowest since September 2016.
Owners of the malls that house retailers are not faring any better. Hammerson Plc has fallen 67% and Unibail-Rodamco-Westfield is down 52%, making it one of the worst performers in Amsterdam’s AEX Index this year.
Beyond malls, two areas have been hit hard by the sell-off. The first is exemplified by Workspace Group Plc, a flexible office-space provider sensitive to short-term demand declines, which has fallen 46%. The other is student property names like Unite Group Plc, down 42% as demand for spaces in its student halls from overseas university-goers is crimped.
Potential buyers not being able to come to view houses has created jitters on the outlook for homebuilders, with the likes of Barratt Developments Plc, Bellway Plc and Crest Nicholson Holdings Plc all down by around half, wiping out the post-election gains the sector racked up. Particularly acutely hit has been retirement housebuilder McCarthy & Stone Plc.
Catering giant Compass Group Plc withdrew its guidance on a hefty drop in demand, particularly in its units providing services to the sports and education sectors. Rivals Sodexo SA and Elior SA followed suit with warnings on their outlooks too, though analysts said that had been expected by the time it arrived. Compass shares are down by more than 40%, a big contributor to the Stoxx 600 Travel & Leisure index’s fall, as it is by far the biggest constituent.
People staying at home means there is substantially less need for public transport. Operators like FirstGroup Plc and Stagecoach Group Plc have lost about two-thirds of their value this year on that risk. Trainline Plc, a ticket-buying portal for train travel in the U.K. and Europe, is down 56%.
In addition to events like the Glastonbury music festival and the Euro 2020 soccer tournament being delayed, corporate conferences have also been suffering from the virus outbreak. Firms which put those events on have therefore been slammed as more are canceled or postponed, with Informa Plc falling 56% and Hyve Group Plc down 78%.
Online grocer Ocado Group Plc had to temporarily shut down its website due to an overload of orders, while Bonduelle SCA, a French maker of canned vegetables and fish, saw its shares jump amid an expected demand boost. Jefferies recommends buying shares of grocers like Ahold Delhaize NV and Carrefour SA as food consumption shifts to the home.
As Ocado can testify to, feeding people stuck indoors is big business right now. Morgan Stanley recommends buying shares of Just Eat Takeaway. Another one to watch is German-listed meal kit provider HelloFresh SE after U.S. peer Blue Apron Holdings Inc. said it’s already seen a boost.
Market volatility usually means more business for companies that offer contract-for-difference products to retail traders. Shares of CMC Markets rallied Friday after the company said its full-year earnings will exceed market expectations, while rivals IG Group Holdings Plc and Plus500 Ltd. have both reported similar boosts to revenue.
Video-gaming offers both entertainment and a way to socialize online. Game-makers like Ubisoft Entertainment SA should benefit strongly from social distancing in the wake of the coronavirus’s spread, analysts at Bloomberg Intelligence wrote in a note, adding that a 10-20% increase in sales over the period is feasible based on China’s experience.
Playtech Plc says its poker and bingo businesses have already seen increases in activity following the restrictions on physical movement put in place by some governments. However, the company cautioned that there’s a risk of player behavior changing the longer the Covid-19 situation continues. Another stock to watch in that sector is Gamesys Group Plc.
As workers set up home offices, telecoms are set to benefit from an increase in data and phone usage. The week saw analyst upgrades for names such as Orange SA and KPN NV, while the Stoxx Telecommunications Index itself was the week’s top-performing sector, rising 8.3%.
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