Goldman Sachs Adds ASML, Sika, and Puig to European Conviction List

Goldman Sachs has updated its European Conviction List for August, adding semiconductor equipment giant ASML, Swiss construction chemical company Sika, and Spanish beauty firm Puig. The bank's analysts simultaneously removed industrial technology firm Schneider Electric and braking systems manufacturer Knorr Bremse from the list of top investment ideas.

The Case for the New Additions

In a research note, Goldman Sachs analysts detailed the specific growth drivers and financial outlook that prompted the changes. Each new addition is supported by a distinct investment thesis, from technology demand to defensive market positioning and brand expansion.

ASML: Strong Orders and Margin Expansion

Goldman Sachs analyst Alex Duval highlighted increased visibility for ASML's capacity additions, which are driven by a strong order intake across both Logic and DRAM chip segments. The bank's earnings per share (EPS) estimates for fiscal years 2027 through 2029 are 5-18% ahead of the market consensus.

Key points for the semiconductor equipment maker include:

• Expected margin growth from roughly 41% in fiscal 2026 to about 50% by fiscal 2029.
• This expansion is underpinned by pricing power, a product mix shifting toward higher-priced platforms, and operating leverage.
• The analyst also noted that over half of ASML's revenue growth stems from non-AI sources, indicating a broad and diverse customer base.

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Sika: Defensive Growth and Pricing Power

For Sika, analyst Ben Rada-Martin pointed to an inflection in sales volumes that he believes is sustainable. This trend is supported by the company's exposure to defensive end markets such as infrastructure, renovations, and data centers.

The bank sees downside protection for Sika's margins, citing its pricing power even as raw material inflation eases. This confidence supports Goldman's fiscal 2027 EPS forecast, which stands 5% above the consensus.

Puig: Untapped Beauty Markets

Analyst Aron Adamski underscored Puig's innovation-led growth, noting the company has its "busiest launch pipelines it has ever had." He identified significant room for growth, or "white space," in the women's fragrance category, where Puig's 8% market share lags its 17% share in men's fragrances.

Further growth potential exists in makeup and skincare, which currently represent less than 30% of sales. The company’s low leverage provides it with the "optionality for selective bolt-ons," or strategic acquisitions, while operating leverage is expected to support margin expansion.