Discretionary: Footware

Adidas

While the footwear maker has stumbled recently, 2023 promises to be a turning point as it brings on a new CEO (Puma’s Bjorn Gulden). Under its “Own the Game” plan, Adidas is targeting an increase in annual sales of at least 8% and an operating profit margin of 12%-14% by 2025, with digital accounting for half of its business. Headwinds include the termination of the Yeezy partnership with Ye, the rapper formerly known as Kanye West, and uncertainty about China, but the company is working on new products, kit deals and endorsements. —Poonam Goyal

Energy: Gas Stations

Adnoc Distribution

Rising visitor traffic in the UAE through the winter—aided by the World Cup in Qatar—is set to bolster fuel volumes and operating profits for this Middle Eastern service station operator. Beyond the global soccer championship, the market doesn’t seem to fully appreciate the company’s peer-leading profitability and growth outlook with a favorable regulatory framework and its well-timed expansion beyond Abu Dhabi into Saudi Arabia and Egypt. —Salih Yilmaz

Industrials: Defense

Airbus

The airplane maker’s flight path looks clearer, with spending increases for European defense and improving supply chains that will support commercial aircraft build rates. Better component availability is key to ramping up production of Airbus’s highly profitable A320 to a targeted 45 per month, which could jump to more than 60 a month in the second half of the year. US-China trade tensions are also helping it win orders in China over rival Boeing. —George Ferguson

Discretionary: Travel

Airports of Thailand

A rebound in the airport operator’s retail and duty-free sales could be undermined by shifts in the mix of visitors and spending patterns, causing revenue to miss consensus expectations by about 15%. Tourists from Southeast Asia tend to spend less, and purchasing power has fallen with inflation. Retail concession revenue will likely lag passenger volume even when historically higher-spending Chinese visitors return to destinations such as Bangkok, Chiang Mai and Phuket, as lower tariffs have spurred them to buy more imported goods. —Denise Wong

Energy: Oil

Aker BP

Even using a conservative assumption of $90 per barrel, the consensus forecast for free cash flow generation by the Nordic oil producer looks low in 2023, meaning higher-than-expected shareholder capital returns are likely. A regular dividend of $2.50 is probable, and a special dividend is also possible. The market doesn’t appreciate the impact of the near doubling of Aker BP’s operational scale from its mid-2022 acquisition of Lundin. —Will Hares

Industrials: Transportation

Allison Transmission

The truck transmission supplier’s profits in 2023 could disappoint, with earnings per share poised to come in more than 10% below the consensus expectation. BI’s analysis identifies weaker economic and freight growth combined with structurally higher research-and-development spending on the alternative powertrain market for electric vehicles. An increasingly competitive market for EV products also threatens Allison’s industry-leading share in its core medium- and heavy-duty vehicle business. —Chris Ciolino

Health care: Biotech

Amgen

Expectations have been rosy for the biotech’s landmark lung cancer drug, Lumakras, but BI’s analysis is more pessimistic, predicting sales could come in as much as 30% below the consensus forecast over the next three years. The US Food and Drug Administration has requested more data, and competitors are on track to enter the market this year, further complicating Amgen’s hopes that its treatment could reinvigorate sales growth. —Marc Engelsjerd

Technology: Semiconductor equipment

ASML

Investors’ fears about the impact of US-China tensions and technology-oriented trade restrictions between the two nations on the world’s leading semiconductor-equipment maker appear overblown. BI’s analysis suggests ASML could increase global sales by about 25% in 2023, exceeding the consensus expectation and beating many peers. It has a dominant position in leading-edge equipment used to make computer chips critical for semiconductors, and it has limited exposure to mainland China relative to competitors, which reduces its risk to possible sanctions. —Masahiro Wakasugi

Financials: Banks

BNP

The French bank looks set to be one of Europe’s top fundamental performers in 2023. Momentum in net interest income, exposure to business banking and generally better revenue expectations set it apart from its peers. The completion of its BankWest sale and redeployment of €7 billion ($7.3 billion) of proceeds across Europe also point to buybacks, dividends and mergers and acquisitions as additional catalysts. —Jonathan Tyce

Staples: Beverages

Brown-Forman

The whiskey maker is poised to beat consensus expectations for sales and profit by a wide margin this year. Its spirits portfolio, which includes Jack Daniel’s, is positioned for rapid gains as consumers return to bars and restaurants. Margins could also get a boost from Brown-Forman’s increasing emphasis on premium-priced bourbons such as Woodford Reserve and Old Forester and tequilas including Herradura and El Jimador. Margins may also see gains from the elimination of tariffs on American whiskies in the EU and UK. —Ken Shea

Industrials: EV batteries

CATL

Profits for the world’s largest maker of batteries for electric vehicles are poised to offer a positive surprise in 2023. Expectations of higher battery prices, lower lithium costs and a sustainable recovery for electric-vehicle sales drive BI’s scenario analysis. Recent cuts to consensus 2023 gross margin estimates look overdone, with raw-material costs likely to recede as the year progresses.—Steve Man

Materials: Chemicals

CF Industries

An extended global supply crunch for natural gas­—used to produce nitrogen, which farmers can’t skip—may give the US-based fertilizer maker a prolonged cash flow boost. CF’s access to low-cost US gas will help position it to capture higher margins than most of its European and Asian peers. The transition to clean energy is also heating up competition for natural gas, which in turn has the potential to keep the nitrogen market tight for years. —Alexis Maxwell

Utilities: Gas

China Gas

Consensus forecasts for China Gas’s fiscal 2023-24 earnings lend too much weight to a recovery in demand and growth in residential volumes and too little to rising gas costs and the Chinese government’s delayed adjustment to city gas tariffs—a response to soaring inflation. BI’s scenario focuses on a profit-margin contraction that could reduce estimates by as much as a third. —Henik Fung

Financials: Insurance

Chubb

The property-casualty insurer is one of the world’s largest and perhaps one of the best underwriters. BI thinks its positioning and expertise could be a source of earnings upside this year. While not immune to the tough economy, Chubb’s business isn’t particularly sensitive to rising prices (businesses must have insurance), and inflation is boosting the underlying values insurance premiums are based on. Its unusually large exposure to Latin America and Asia also helps diversify its risks. —Matthew Palazola

Technology: IT Services

Cognizant

The IT services consultant’s 2023 sales growth risks falling short of the 7% consensus expectation. The company isn’t as well positioned as its peers to benefit from the structural growth opportunities from digital services, and it suffers from the sector’s worst attrition rate. Together, these factors could mean Cognizant is more vulnerable to weakening macroeconomic trends. BI’s analysis shows there’s a 10% risk to operating income and earnings estimates in 2023. —Tamlin Bason

Financials: Services

Computershare

The provider of share registries for the investment industry is poised to benefit from rising interest rates. The company’s profits rely on income generated by client balances, which are mainly denominated in US dollars, British pounds, Canadian dollars and Australian dollars. The yield on those holdings could jump from 0.6% in fiscal 2022 to 2.3% in fiscal 2023 and to 2.7% in 2024, helping Computershare beat market expectations for 2023 profits by as much as 40%. —Sharnie Wong

Staples: Beverages

Constellation Brands

The drinks maker may be ready to pursue mergers and acquisitions in 2023 to accelerate growth. By eliminating its supervoting class of common stock in November, it now has significantly greater flexibility to restructure its portfolio. This might involve expanding the scope of its beer business, adding scale to its wine and spirits segment and possibly pursuing a transformational deal that could establish an international footprint. —Ken Shea

Health care: Vision

Cooper Cos.

Increased growth in the contact lens market and higher rates of myopia (nearsightedness) could bring attention to the eye-care company this year. A consensus forecast for mid-single-digit revenue growth looks too conservative based on BI’s eye-care survey, which showed room for expansion with more expensive daily solutions. Cooper Cos.’ new myopia-slowing products for kids—MiSight contacts and SightGlass glasses (a joint venture with EssilorLuxottica)—may be further catalysts. —Ann-Hunter Van Kirk

Staples: Beverages

CR Beer

Profitability of the owner of Snow, the world’s best-selling beer brand, looks set to take a hit. BI’s analysis suggests the consensus expectation for a 2023 increase in the brewer’s profit margin underestimates the negative impact of elevated costs for materials such as malting barley and packaging, as well as higher spending on marketing for premium products and costs tied to a recent liquor acquisition. —Ada Li

Technology: Software

CrowdStrike

The provider of enterprise cybersecurity software is positioned to take increased share from traditional software security peers as the proliferation of devices outside corporate firewalls boosts demand for its services. BI’s models point to a 30%-plus gain in sales for at least the next two years, driven by CrowdStrike’s expanding product suite, increasing sales via channel partners such as Amazon Web Services and the growing risk of cyberattacks. —Mandeep Signh

Communications: Media

Disney

The media titan’s year could be a tale of two halves. With Disney’s shares down about 50% from their 2021 high, the market is focused on content costs, increasing direct-to-consumer competition and theme park recession risks—concerns that may linger into the early months of 2023. But a reorganization that allows the company to accelerate its streaming strategy as it positions itself for a digital future could start to bear fruit in the second half. Robert Iger’s return as CEO adds further opportunity for a meaningful turnaround. —Geetha Ranganathan

Discretionary: E-commerce

EBay

Recent initiatives to build back share at the online retailer through authenticity guarantees and certification of purchase could help revenue grow well above expectations. The integration of payments and addition of paid promoted listings are also boosting the percentage of sales that EBay keeps, known as its take rate. A new focus on advertising and on the sale of refurbished items are other positive moves. —Poonam Goyal

Industrials: Electrical equipment

Emerson

The electrical equipment powerhouse is tied to the energy sector, where an outlook for sustained elevated prices could drive consensus-beating earnings. A record order backlog for its industrial automation equipment also bodes well for 2023, and a multiyear plan to curb costs may reap $650 million of savings. With a still-new CEO, strategic business portfolio changes are also possible. —Karen Ubelhart

Staples: Food

Givaudan

Despite impressive growth for the flavor and fragrance maker through the pandemic, 2023 looks set to be a challenge as weaker consumer demand and rising costs cause its key customers (both food processors and home- and personal-care companies) to scrutinize new-product initiatives more closely. Innovative introductions, which are key to Givaudan’s sales growth, could pause. —Duncan Fox

Materials: Miners

Glencore

The miner’s earnings appear more resilient than those of its peers, yet its valuation is the most depressed relative to long-term averages. Glencore is the only major mining company with meaningful exposure to coal as climate concerns have cut investment in new mines. With prices surging as European utilities switch to coal amid gas shortages triggered by the war in Ukraine, the fuel makes up more than 60% of the company’s operating profit. —Alon Olsha

Real estate: Property developer

Henderson Land

The Hong Kong property developer could suffer a double whammy this year from weakening home sales in the region and higher financing costs. Consensus expectations that an increase in new-home completions will translate into meaningful earnings growth look likely to disappoint. Sell-through rates of smaller “shoe box” units may remain weak, and rate hikes are problematic for investment demand in its new Kai Tak development. —Patrick Wong

Real estate: Property agent

KE Holdings

China’s largest property agent risks missing 2023 consensus earnings estimates as wariness among prospective customers impedes top-line recovery. Buyers’ deferrals threaten to limit growth in home purchases, which could mean a revenue miss of more than 15% and an earnings-per-share disappointment of 30%. —Kristy Hung

Health care: Pharmaceuticals

Lilly

The drugmaker is looking at a big year: Sales expectations for its new diabetes medication, Mounjaro, could prove conservative, and the drug’s approval for treating obesity might add to the company’s growth. New drugs for cancer, psoriasis and ulcerative colitis should also boost sales. But the outlook for its Alzheimer’s drug and marketing costs present risks, especially if therapy launches start slowly. —John Murphy

Technology: Electronic manufacturing

Luxshare Precision

The electronics manufacturer could be one of the very few Apple suppliers to consistently gain market share as the computing giant pushes to diversify its supply chain. BI believes Luxshare could grab up to 25% of iPhone assembly orders by 2025, versus about 6% currently. Luxshare’s leadership in the AirPods supply chain could also increase with GoerTek, a key competitor, losing a contract in late 2022. —Steven Tseng

Discretionary: Luxury goods

LVMH

The luxury-goods maker looks set for a strong 2023, with China loosening Covid-19 restrictions and the global recovery of travel and tourism gaining pace, as Chinese consumers have long been key buyers. LVMH revenue could increase 20%, with the biggest contributions coming from wines and spirits, perfume and cosmetics, and retail (DFS, Sephora). In addition, the company’s peer-leading fashion and leather goods unit demonstrates that consumer demand isn’t being rattled by price increases. —Deborah Aitken

Technology: Semiconductors

MediaTek

The chipmaker’s expansion into the premium smartphone processor segment is gathering speed, and BI believes it should lead to better 2023 sales growth than industry leader Qualcomm. MediaTek’s plan to launch higher-performance and more cost-effective system-on-a-chip products (Dimensity 8000 and 9000 series) for 5G smartphones could help the company gain market share. The releases are timed for faster penetration of 5G in key emerging markets such as India this year. —Charles Shum

Health care: Medical devices

Medtronic

The US launch of the medical device company’s new treatment for high blood pressure could be the prescription needed to reinvigorate growth. The minimally invasive procedure, poised for FDA approval in 2023, removes nerves from the renal artery to treat high blood pressure in lieu of ongoing medication. The market for this type of hypertension treatment could be worth $1 billion by 2026—almost double management’s expectations—and more than $3 billion by 2030. —Matthew Henriksson

Communications: Internet

Meta

Facebook’s parent had a tough 2022, but the challenges it faces this year may be even more daunting—and consensus estimates for its profit margin appear too optimistic. Meta is confronting a sharp deceleration in top-line growth at its core advertising business and higher operational costs tied to its Reality Labs segment, which is developing AR/VR hardware and software. Payouts to creators of content for its Reels product could add more pressure. BI’s scenario suggests that profit growth could be revised down by 10% for 2023. —Mandeep Singh

Technology: Software

Microsoft

A recovery in spending on cloud computing after a slowdown could spur surprises to the upside over the next two years for Microsoft, with the second half of 2023 poised to be a positive inflection point. Although weak economic conditions will likely hurt the early part of next year’s top-line results, BI thinks the importance of Microsoft’s cloud suite and the critical nature of its desktop products bode well for second-half sales. —Anurag Rana

Communications: Media

Netflix

Expectations for the streaming-video provider’s sales appear conservative for 2023, given the unveiling of Netflix’s ad-supported pricing tier. BI’s analysis points to more than $1 billion in additional revenue and potential sales growth of around 11%, versus the consensus projection of about 8%. Advertising should support a higher average revenue per user, offsetting any cannibalization of subscription revenue from customers downgrading to cheaper plans.. —Geetha Ranganathan

Health care: Pharmaceuticals

Novo Nordisk

The market appears to be underestimating the longer-term sales and earnings potential of Novo Nordisk’s diabetes and obesity drugs. The company should see supply chain issues resolved along with a sales increase in 2023. In addition, Lilly’s Mounjaro (a similar drug) and a fast-track FDA approval of another related product might bring more attention to opportunities in this class of drugs. —Michael Shah

Communications: Telecommunications

Orange

The French telecommunications operator is on track to deliver positive dividend surprises in 2023, with BI’s analysis pointing to the 2022-24 distribution beating consensus by more than 20%. Better cash flow is at the heart of beefier shareholder returns, bolstering the regular dividend payout ratio. A special dividend is also part of the story, given a pending deal with Orange’s Spanish unit and a possible sale of its money-losing bank business. —Erhan Gurses

Discretionary: Auto retail

Penske

Even as economic growth slows, the auto retailer is driving an increasingly profitable business by shifting between new- and used-car sales underpinned by its lucrative service unit. Pandemic-related supply disruptions reduced what had been big inventories of unsold new cars, boosting profitability. At the same time, Penske is moving its preowned mix toward higher-end cars, which should help push its earnings above consensus expectations in 2023. —Kevin Tynan

Discretionary: Auto

Porsche

With its September initial public offering, the sports-car maker had a notable year. But 2023 may be even more important as Porsche accelerates a shift to electric vehicles, which could make up 45% of sales by 2025. New software advances and technology partners could soon emerge to help with the transition. In the meantime, all models have strong order backlogs worldwide, helping shield Porsche from recession risks. —Mike Dean

Financials: Insurance

Prudential

After jettisoning its US operations in 2021 and losing its CEO and CFO last year, the Asia-focused life insurer is poised for a rebound. A new CEO starts in February, and Beijing’s relaxation of its Covid Zero policy could accelerate Prudential’s large Hong Kong-based China business. BI believes consensus earnings estimates may rise through the year. —Kevin Ryan

Energy: Natural gas and refining

Repsol

With its strength in refining and natural gas, the Spanish energy major is well positioned for 2023. About two-thirds of its upstream production is oriented to gas, and it has a bigger percentage of sales in refined products than its peers. Given Repsol’s elevated profitability, BI’s analysis suggests that consensus is too conservative. —Salih Yilmaz

Real estate: Property management

Shaftesbury Capital

The owner of retail property in London’s West End risks seeing the value of its portfolio drop as interest rates rise, but BI’s scenario shows the decline may be only 20%, versus the 40% suggested by the market. The real estate investment trust is a combination of Capco and Shaftesbury that’s set to close in the first quarter of 2023. It’s primarily involved in retail in areas of the capital (Covent Garden, Chinatown) that are benefiting from increased tourist traffic due to the weakened pound. The REIT has the potential to recover more quickly than its peers if a rebound comes later this year as current recession risks eventually fade. —Sue Munden

Industrial: Transportation

Singapore Airlines

Operating at about 75% of its 2019 levels, the flag carrier could beat consensus on its profits this year. Increasing passenger capacity, strong travel demand in all cabin classes, elevated cargo-pricing levels and lower fuel costs should support higher earnings. Strong cash flow may also allow for the redemption of a convertible bond issued during the pandemic and possibly even acquisitions. —Tim Bacchus

Technology: Consumer electronics

Sonos

The smart-speaker maker faces a David-versus-Goliath patent case with Google, but BI is optimistic Sonos will succeed in the dispute, which goes to a jury trial in May. If it secures a royalty agreement for Google’s use of its patented wireless speaker technology, Sonos could top consensus estimates of earnings before interest, taxes, depreciation and amortization by at least 20%. The looming risk of a large damages award could encourage Google to settle. —Tamlin Bason

Materials: Steel

SSAB

Weakening demand may showcase this European steelmaker’s economically defensive qualities. It’s better positioned to protect earnings than in previous downturns, thanks to a streamlining of its more cyclical European unit, robust margins at its niche specialty steel division and revenue exposure to heavy-plate products where supply has been constrained because of Russia’s war in Ukraine. Its sector-leading decarbonization efforts have the potential to attract government funding. —Grant Sporre

Financials: Banks

Suncorp

The Australian insurer is positioned to pay out significant dividends to shareholders through June 2023. An agreement to sell its banking unit to ANZ, excess capital above regulatory requirements and a payout ratio at the high end of its 60% to 80% range could add up to A$6 billion ($4 billion) of distributions. This equates to about 40% of its current market capitalization. —Matt Ingram

Technology: Semiconductors

TSMC

The world’s largest semiconductor foundry is positioned to weather a cyclical market downturn better than its peers. BI’s analysis indicates sales growth in the midteen range for 2023, versus the consensus estimate of 8%. Its dominant industry position, including in a new generation of miniaturization and chipset packaging technology, should support its pricing power and a strong recovery as industry demand improves, which could happen by the third quarter of 2023.—Charles Shum

Technology: Consumer electronics

Universal Display

Commercialization of the lighting company’s innovative blue-emitter technology for smartphones and OLED TVs could accelerate in 2023 with new adoptions. BI expects the sector’s Display Week event in Los Angeles in May to bring an update from Samsung on its smartphone display integration plans, and there may be similar developments with iPhones later in the year. Universal Display’s revenue and earnings expectations should ramp up as a result. —Woo Jin Ho

Energy: Wind turbines

Vestas

The supplier of wind turbines should see 7% average annual growth in gigawatts of capacity delivered out to 2025. Elevated prices of carbon-based fuels because of the war in Ukraine, increased US and European policy support, and an accelerating offshore wind market further point toward this scenario. Falling steel prices add to the case for robust operating profit potential for 2023. —Rob Barnett

EMEA: Infrastructure

Vinci

The ambitious scale of Europe’s infrastructure investment promises peer-beating growth and recession resilience for Vinci. BI’s scenario points to a double-digit revenue increase in its concessions (London’s Gatwick airport and various European toll roads) and energy projects, driving operating profit well above current market expectations this year and in 2024. —Sonia Baldeira