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Which U.S. Companies are Most Exposed to Europe?

The Ukraine war is hurting Europe’s economies the most with the continent dependent on Russia for energy.
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The war in Ukraine is hurting Europe’s economies the most, particularly because of the continent’s dependence on Russia for oil and natural gas supplies.

To be sure, European stocks have outperformed those in the U.S., with the Stoxx Europe 600 index falling 15% year to date, compared to the S&P 500’s 18% drop.

In any case, Bank of America has put together a list of the S&P 500 stocks with the most exposure to Europe, as measured by their sales exposure to the continent.

Here is the top 10, in order of sales exposure.

1. Booking Holdings  (BKNG) , an online travel agency. Portion of sales from Europe: 78%.

2. Estee Lauder  (EL) , a cosmetics company. Portion of sales from Europe: 43%.

3. Cooper Cos.  (COO) , a medical device company. Portion of sales from Europe: 41%

4. DXC Technology  (DCX) , an information technology services company. Portion of sales from Europe: 41%.

5. International Flavors & Fragrances  (IFF) , a consumer products company. Portion of sales from Europe: 41%.

6. Autodesk  (ADSK) , a software company. Portion of sales from Europe: 40%.

7. Amcor  (AMCR) , a packaging company. Portion of sales from Europe: 39%.

8. Mondelez  (MDLZ) , a food company. Portion of sales from Europe: 39%.

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9. Celanese  (CE) , a chemicals company. Portion of sales from Europe: 38%.

10. Fortinet  (FTNT) , a cybersecurity company. Portion of sales from Europe: 38%.

Morningstar’s Take on Booking Holdings

Morningstar analyst Dan Wasiolek assigns the company a narrow moat and puts fair value for the stock at $3,000. It recently traded at $1,927.

“While covid-19 and inflation concerns continue to be overhangs on near-term travel demand, we see Booking exhibiting solid financial health,” he wrote in a May commentary.

“Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific and continued leadership in Europe.”

It will also benefit from “an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale,” Wasiolek said.

Morningstar’s Take on Estee Lauder

Morningstar analyst Rebecca Scheuneman gives the company a wide moat and puts fair value for the stock at $283. It recently traded at $264.

“Although the pandemic is presenting challenges for Estee and its peers, we remain optimistic about its competitive position and long-term strategy,” she wrote in a May commentary.

“Estee has made significant investments in omnichannel, marketing, and innovations that are helping the firm recover briskly from the pandemic and the subsequent inflation and supply chain disruptions.”

Also, “we believe the firm’s growth opportunities should persist over the long term as emerging markets (a third of sales) still spend significantly less than developed markets on prestige beauty,” Scheuneman said.