The private bank Oddo BHF did not wait for the Olympic Games to designate its champions. Analysts from the Franco-German establishment have dissected the models of large companies on the European stock markets to find those which will do well this summer, between the Euro football tournament in Germany, from June 14 to July 14, and the Olympics of Paris 2024, from July 26 to September 8. In total, 15 million visitors expected in France, 7 million across the Rhine. And great hopes for the two powers of the Old Continent, while one slips and the other slips.
The economic benefits of these mega sporting events are difficult to assess, with the one-off boost generally being negatively compensated subsequently. “No study shows, for example, that the London Olympic Games in 2012 had the slightest lasting macroeconomic impact,” recalls Bruno Cavalier, chief economist of Oddo BHF. Sports economists speak of a ‘victor’s curse’ (winner’s curse). The host country or city does not perform better economically than its unsuccessful competitors, and often the opposite.”
On the microeconomic scale, however, there will be winners. Financial analysts have listed their favorites: JCDecaux, Accor, Sodexo, Adidas, Unibail-Rodamco-Westfield and easyJet. Six companies well placed to take advantage of the excitement inherent to these popular sporting events. Six stocks listed on the stock exchange, full of appeal, for which the European Championship and the Olympic Games will be a plus. And that equity investors have every interest in playing now, according to Oddo BHF.
Why these companies? More traffic means more audience for the advertisements displayed on JCDecaux street furniture. Firmly anchored in France – 18% of its turnover – the world leader in outdoor communications also operates across the Rhine – 7% of sales. Combined, the two events could bring it 40 million euros more in the third quarter, estimates Oddo BHF. The hotelier Accor, for its part, carries out 10% of its activity in Paris and its region – it will also be sensitive to the tourist influx in Germany, linked to the Euro.
Big stakes also for the French collective catering giant Sodexo, which will provide cover for the Olympic village and the 14 competition sites: 80 million euros in revenue at stake, from July to September. The Unibail-Rodamco property company is concerned in two ways by the Olympic Games, with four of its sites made available to host the press and certain events, and eight shopping centers where you can buy official Paris 2024 products and meet athletes. Adidas and easyJet are especially interested in football matches in Germany.
More generally, no one is safe from a pleasant surprise. The French – and especially the Parisians – see the start of the Olympic competitions, the invasion of tourists, the traffic disruptions, the risk of cyberattacks and terrorist attacks arriving with a certain apprehension. However, a successful organization and French athletes there would quickly boost the morale of the refractory members… and of the European financial markets. Let’s remember the “1998 World Cup” effect. Major sporting victories stir up a wave of optimism, benefiting household consumption and therefore boosting economic growth.
However, Oddo BHF does not avoid the hypothesis of a dark scenario. “If the organization were to be faulty or too cumbersome for the rest of the economic activity, a negative effect cannot be excluded. The question arises mainly for the Paris Olympic Games, in view of the latest announcements which provide in particular to cut very important Ile-de-France roads for two and a half months, with a potential economic backlash for a region which accounts for around 30% of French GDP. The worst is never certain.
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