EURO 2024 brings new investment opportunities: Key industries and companies to watch on the stock exchange

The UEFA European Championship, commonly known as the Euro, has kicked off, featuring 24 teams, including Romania, competing for the European title. While the event draws millions of fans worldwide, it also brings significant opportunities for investors to capitalize on the resulting economic boost.

The revenue growth from the UEFA European Championship over the past three decades shows remarkable growth and commercial success, from €40.9 million in 1992 to an impressive €1.882 billion in 2021. EURO 2024 is expected to generate over €2 billion in revenue, with substantial contributions from tourism and hospitality.

In this context, this tournament also presents investment opportunities in the stock market. By strategically investing in companies poised to benefit from increased consumer spending, media revenues, and infrastructure development, investors can potentially capitalize on the economic boost from this event.

Analysts at Freedom24, the brokerage platform providing access to the world’s largest stock exchanges, offer practical investment recommendations, highlighting key industries and stocks poised for growth in the context of EURO 2024.

Industries and companies to watch out for

1. Hospitality and tourism

● Recommendation: Consider investing in hospitality and tourism companies, especially those associated with host cities or regions.

● Key Stocks: Explore hotel chains, airlines and travel agencies present in EURO 2024 host cities. Examples include Marriott International (MAR), Hilton Worldwide Holdings (HLT), Airbnb (ABNB), Booking.com (BKNG) and Expedia Group Inc. (EXPE).

Airbnb (ABNB) is a platform that majorly benefits from international events like the Olympics or European Championships due to the boost in demand for accommodation. With millions expected to visit Germany and Paris, Airbnb will experience a surge in bookings and revenue.

In 2023, Airbnb generated $9.9 billion in sales, more than double its 2019 pre-pandemic revenue. Since 2021, the company has consistently achieved positive operating profit due to its low-cost, asset-based business model, resulting in sustainable free cash flow—$1.9 billion last quarter. As of March 31, Airbnb held $11 billion in cash and short-term investments, with only $2 billion in long-term debt, reducing financial risk for shareholders. Its strong financial health, competitive advantages, and proven business model make it an attractive investment. With significant growth potential and a compelling valuation (price-to-earnings ratio of 20), Airbnb is worth considering.

Booking Holdings (BKNG), a leader in the global online travel industry, operates popular platforms such as Booking.com, Priceline.com, Kayak.com, and Agoda.com. In the first quarter of FY2024, the company reported a 17% year-on-year increase in revenue to $4.4 billion and a 192% increase in net income to $776 million, surpassing expectations.

With a robust travel portfolio and strong market presence, Booking Holdings is well-positioned to capitalize on the surge in travel activity. Major events like the Olympic Games and EURO provide an excellent opportunity for the company to leverage its platforms, allowing travelers worldwide to easily book accommodations, flights, and experiences. This strategic advantage is expected to drive further financial success, solidifying its leadership in the online travel industry.

2. Media and broadcasting

● Recommendation: Focus on media companies with broadcasting rights or advertising partnerships related to EURO 2024.

● Key Stocks: Consider investing in broadcast networks, streaming platforms, and advertising agencies. Companies such as The Walt Disney Company (DIS), Comcast Corporation (CMCSA), and Alphabet (GOOGL) can benefit from increased viewership and advertising revenue.

Alphabet (GOOGL) derives a substantial portion of its revenue from advertising, particularly through its Google Ads and Google AdSense platforms. The company’s leadership position in the advertising market and the expected increase in ad spend during major events position Alphabet for significant revenue growth. In Q1 2024, Alphabet saw a 15% revenue increase, driven by a 21% rise in YouTube ad revenue. Operating income grew 46% year-on-year to $25.47 billion, resulting in an EPS of $1.89, surpassing Wall Street’s expectation of $1.50. Operating margins increased to 32% from 25% the previous year. CEO Sundar Pichai attributed this success to robust performance in search, YouTube, and cloud services. Further growth is anticipated in the second half of the year, fuelled by the EURO 2024, 2024 Summer Olympics, and the US presidential election.

3. Retail and consumer products

● Recommendation: Keep an eye out for retailers offering sporting goods and apparel, as well as companies benefiting from increased consumer spending during the event.

● Key stocks: Consider investing in sportswear manufacturers, retailers and brands present in the EURO 2024 host countries. Potential candidates include Nike Inc. (NKE), Adidas AG, Puma, Coca-Cola (KO).

The sportswear market, valued at about $200 billion annually according to Statista, is poised for a potentially record-breaking year in 2024 due to two major international sporting events: the 2024 EURO and the Olympic Games in Paris from July 26 to August 11.

Nike (NKE), a leading sponsor and supplier of sports equipment for EURO 2024, stands to achieve increased sales and brand awareness. The event provides Nike with an ideal platform to showcase its latest apparel and footwear lines designed specifically for the games. By leveraging the global visibility and performance of sponsored athletes, Nike has the potential to drive increased consumer demand and brand loyalty, thereby strengthening its market leadership. Investors should monitor Nike’s stock performance and market reaction during the Olympics to gauge the company’s trajectory and market sentiment.

Additional factors to consider

1. Diversification: Spread your investments across several sectors to mitigate risks and capitalise on the various post-EURO 2024 opportunities.

2. Global presence: Look for companies with diversified revenue streams and global operations to minimise the impact of local events and economic fluctuations.

3. Risk Management: Stay abreast of geopolitical risks, regulatory changes and market dynamics that may affect investment performance during and after EURO 2024.

4. Long-term perspective: While short-term gains are possible, consider the long-term growth potential of individual sectors and stocks beyond the event period, thus increasing the likelihood of gains over the long term.

Freedom24 offers Romanian retail investors access to over 1,000,000 trading instruments including stocks, ETFs, futures, bonds, and stock options across 15 major American, European and Asian exchanges (NASDAQ, NYSE, CME, HKEX, Euronext, LSE, Deutsche Börse, etc.). The platform has some of the lowest trading fees in Europe: starting at €0.02 per stock/ETF plus €2 per order, and $0.65 per contract for US stock options.

The intuitive, user-friendly platform allows users to view stock quotes in real time, issue trade orders to buy and sell securities and track the status of their portfolio. Freedom24 is available on desktop and mobile, as a multiplatform app (iOS, Android, and Huawei).