Outlook 2022

Top 25 firms to watch

For Swissquote Magazine, several analysts agreed to reveal their favourite stocks for 2022. The selection is obviously subjective, but investors should watch closely all the same.

By Bertrand Beauté and Julie Zaugg

  • Foundation: 1844
  • Headquarter: Winterthur (CH)
  • Revenues: CHF 658.6 M (2020)
  • Effectives: 2538
  • Stock Exchange:

This company, which was founded in the 19th century as a small mechanical workshop, has become the global leader in compressors – devices which increase the pressure of a gas. It recently completed a restructuring, divesting its unprofitable US division. Burckhardt Compression should see its sales grow exponentially for compressors used in the green hydrogen industry, according to Eugen Perger, an analyst at Research Partners: "This industry is driven by national commitments to reduce CO2 emissions," he said. "Burckhardt Compression is one of the only companies that is able to provide the type of compressors used in hydrogen plants." The company is involved in several large projects in South Korea and Japan. "Tokyo plans to build the largest hydrogen plant in the world in the region where the Fukushima disaster occurred," said Perger. The massive Chinese market will soon follow, according to the analyst.

  • Foundation: 1947
  • Headquarter: Rome (IT)
  • Revenues: €1.152 BN (2020)
  • Effectives: 3000
  • Stock Exchange:

Cementir is the world leader in white cement – a cement characterised by its whiteness obtained by using purer limestone – with a production capacity of 13.1 million tonnes. And the Italian company is driving innovation in the industry. One example is its FUTURECEM technology, a patent-protected cement whose production emits 30% less CO2 than traditional cement processes. This niche market is likely to develop as a result of efforts to limit global warming. "Cementir is fully committed to working towards a low-carbon economy with FUTURECEM, an innovative cement that emits less CO2," says René Locher, head of Equity Research Switzerland at Stifel. The bank recommends buying the stock. "We like the idea, where an eco-friendly product comes with lower capital costs and higher margins." The share, which is currently trading below €9, could rise to €12 in 2022.

  • Foundation: 2009
  • Headquarter: Dortmund (DE)
  • Revenues: € 33.1 M (2020)
  • Effectives: 290
  • Stock Exchange:

More and more electric vehicles are hitting European roads, showing no sign of slowing. The European Electric Car Report estimates that 886,000 EVs were sold in Europe in the first ten months of this year. That is, more than during the entire 2020 (up 50%), which was already a year of strong growth compared to 2019. As a pioneer in charging stations, German company Compleo is set to benefit from this growth in popularity. "Compleo is an interesting company, whose valuation could rise further as charging infrastructure catches up to electric car sales," says René Locher, head of Equity Research Switzerland at Stifel. They recommend buying shares. Since it was founded in 2009, Compleo has installed more than 35,000 charging points in Europe, holding 15% to 20% of the market. The company’s share price, which is currently trading below €70, could reach €110 by 2022.

  • Foundation: 2010
  • Headquarter: New York (US)
  • Revenues: $603.5 M (2020)
  • Effectives: 2185
  • Stock Exchange:

Founded in New York by two French entrepreneurs, this start-up has developed a very innovative tool that can monitor the functioning of an app or infrastructure hosted in the cloud. The idea is to evaluate the app’s performance and identify any potential weaknesses. "Datadog has quickly become the leader in this market and only has one other competitor – the start-up Dynatrace," said Bhavan Suri, analyst at William Blair. As more and more companies develop apps and export their systems into the cloud, Datadog’s potential client base is growing. "This explains how its revenue increased nearly 70% in Q2 2021, compared to the same period last year," said Suri, who believes that revenue will continue to increase by 50% yearly in the coming years. The company’s shares have already risen by more than 35% in 2021.

  • Foundation: 1991
  • Headquarter: Grünwald (DE)
  • Revenues: € 793.8 M (2020)
  • Effectives: 2300
  • Stock Exchange:

"Dermapharm is in a privileged position, wedged between manufacturers of innovative drugs and producers of generics. That means it has little pressure from competition on niche markets," says René Locher, head of Equity Research Switzerland at Stifel. They recommend buying the share. The German company is unique in that it manufactures drugs that are no longer patent protected, but face little or no competition because they are difficult to produce. The firm has also partnered with BioNTech to manufacture mRNA COVID-19 vaccines. "Dermapharm is a defensive but attractive company," Locher says. "It will benefit from the BioNTech deal in the medium term, while gradually moving into more innovative and higher-margin businesses, such as its investment in immunotherapy developer Corat Therapeutics." The share price could reach around €100 by 2022, up from around €80 today.

  • Foundation: 2003
  • Headquarter: San Francisco (US)
  • Revenues: $1.453 BN (2021)
  • Effectives: 6200
  • Stock Exchange:

Now that practically everyone can work from home, electronic signatures are increasingly common. They now replace handwritten signatures at the end of contracts. That news couldn’t be better for DocuSign, the electronic signature specialist. In 2021, the US company generated revenue of $1.453 billion, up 49% year over year. It is worth pointing out the clear advantages of the eSignature. As people no longer need to travel to sign contracts, the solution is more practical and often less expensive than its paper counterpart. In addition, the two-step verification system via a code sent over SMS suggests that the technology can be more reliable than manual signatures. Despite competition from other software solutions, such as Adobe Sign or Yousign, DocuSign is expected to benefit as economies increasingly transition towards digital solutions, says Wedbush Securities analyst Daniel Ives. He predicts the share will reach $330 by 2022, up from less than $250 today.

  • Foundation: 1987
  • Headquarter: Paris (FR)
  • Revenues: €44.65 BN (2020)
  • Effectives: 150500
  • Stock Exchange:

"Due to rising raw material costs, some companies feel the squeeze on margins," says Nicolas Simar, senior portfolio manager of Euro and European High Dividend strategies for NN Investment Partners. Luxury goods remain an attractive sector for 2022, despite a high valuation, because it enjoys the immense leeway to jack up its prices, in effect passing on higher raw material costs to its customers, and therefore protecting its margins." As the world’s luxury leader, the French group LVMH boasts a strong position for defensive investors. LVMH posted revenue of €44.18 billion for the first nine months of the year. That surpassed the figure for the same period in 2020, amid all the lockdowns, by 40%, and for the first nine months of 2019 by 11%, i.e., pre-pandemic. Currently trading below €730, the share could reach €750 in 2022.

  • Foundation: 2011
  • Headquarter: Sunnyvale (US)
  • Revenues: $86 M (2020)
  • Effectives: 250
  • Stock Exchange:

Matterport’s IPO on the Nasdaq in July 2021 was low-key. "The company remains under investors’ radar, but it could play an important role, especially in the luxury property market," says Daniel Ives, an analyst at Wedbush Securities, who has issued a buy recommendation on the share. The US company develops 3D cameras and software to create a digital twin of a space in 3D. While Google has mapped the outside world, Matterport goes inside buildings, including homes, offices, hotels, factories and shops, to enable virtual walkthroughs. Matterport’s clients include the US luxury property specialist Redfin and the holiday rental company Vacasa.

  • Foundation: 1975
  • Headquarter: Redmond (US)
  • Revenues: $168 BN (2021)
  • Effectives: 190000
  • Stock Exchange:

The Redmond-based firm continues its outrageous growth thanks to the health crisis, which has led to an astounding rise in remote working. Accordingly, demand for computer hardware and the use of cloud-based services have intensified. Microsoft posted record revenue of $45 billion between July and September 2021 (the first quarter of its 2022 fiscal year), up 22% on the same period a year earlier. The increase was driven by cloud services, with a 50% leap in revenue from its Azure platform, following on from the firm’s strong business growth in previous months. "The cloud revolution is under way, and Microsoft is our favourite stock to reap the benefits of it," says Daniel Ives, an analyst at Wedbush Securities. He believes that the share, currently trading at around $340, could reach $375 in 2022.

  • Foundation: 1993
  • Headquarter: Santa Clara (US)
  • Revenues: $10.92 BN (2020)
  • Effectives: 18100
  • Stock Exchange:

2021 has been a strange year for semiconductors. Plaguing the industry this year is the global shortage of silicon chips, which is expected to continue into next year. Yet Nvidia seems to be faring well. "Quite the opposite, it has heightened demand for its graphics cards. They’re now being resold at three times their standard price on Amazon and other e‑commerce platforms," says Bernstein analyst Stacy Ragson. On top of that, he says, Nvidia’s customers are all in fast‑growing sectors such as data centres, video games and cryptocurrencies. If all goes well, Nvidia shares could go from trading at the current price of less than $320 to as high as $400 in 2022. But the company is already well valued and the stock could be negatively impacted if Nvidia’s takeover of ARM fails. Announced nearly a year ago for $40 billion, the operation is still pending. The European Commission, which has expressed its concerns about the potential impacts of this consolidation, is giving itself until 15 March 2022 to take a decision.

  • Foundation: 1999
  • Headquarter: Roubaix (FR)
  • Revenues: €632 M (2020)
  • Effectives: 2500
  • Stock Exchange:

In Europe, companies have long been hesitant to work in the cloud. "They wonder where their data is being stored, and who has access to it," said Patryk Basiewicz, analyst at FinnCap. This situation created an opportunity that French company OVHcloud has used to its full advantage. It offers a private cloud service, which allows clients to maintain a level of control over their data. OVHcloud’s product is also less expensive than other cloud giants such as Amazon, Microsoft and Google. "OVHcloud solutions are ideal for SMEs, because they are lowcost and easy to access," said the analyst. "It only takes a few minutes to purchase a private cloud from its platform." The company, which went public on the Paris exchange in October, is just starting to take off, but it operates in a booming segment and benefits from strong recognition in the industry, according to Basiewicz. He believes that it will profit in particular from software giant SAP’s migration to the private cloud.

  • Foundation: 2005
  • Headquarter: Santa Clara (US)
  • Revenues: $4.3 BN (2021)
  • Effectives: 11000
  • Stock Exchange:

Originally known for its firewalls, Palo Alto Networks has, in just a few years, grown into an IT security behemoth providing a wide array of services. The Californian firm is especially active in Internet of Things (IoT) and cloud-native security. This diversification is partly the result of its voracious acquisition appetite. Palo Alto has bought a dozen companies since 2018, including cloud application security expert Bridgecrew in February for $156 million. Due to the increase in online fraud during the pandemic, the company is showing healthy growth. Its revenue has risen from $3.4 billion in financial year 2020 (ended 31 July) to $4.26 billion in 2021 (up 24.9%). And it won’t stop there. Palo Alto targets revenue of between $5.3 billion and $5.4 billion for its 2022 financial year. Analysts Daniel Ives and John Katsingris from Wedbush Securities believe that the share price could rise from the current $540 to between $600 and $630 in 2022.

  • Foundation: 1996
  • Headquarter: Zug (CH)
  • Revenues: € 223 M (2020)
  • Effectives: 1026
  • Stock Exchange:

In pharmacology, scientists use polypeptides – a substance made up of several amino acids – to develop vaccines or to produce the primary active ingredients that are used in treatments for hormonal cancers, diabetes and osteoporosis. "The polypeptides market is dominated by a duopoly made up of the Basel-based Bachem and Zug’s PolyPeptide, which gives them virtually complete control of this booming sector," said Daniel Buchta, analyst at Zurich Cantonal Bank. PolyPeptide products are used notably in some medicines to treat Type 2 diabetes, a disease that affects a growing segment of the population. "In the future, these treatments could also be prescribed for people with obesity," said the analyst. In the shorter term, the company contributed to the development of the Novavax COVID-19 vaccine, which is about to be deployed in several countries and should result in increased growth of 20% in 2022, according to Buchta.

  • Foundation: 1985
  • Headquarter: San Diego (US)
  • Revenues: $23.5 BN (2020)
  • Effectives: 41000
  • Stock Exchange:

In the last five years, the Californian company has weathered a series of attacks and emerged on the other side. It went to court against Apple, its largest client, with accusations that Apple stole its patents; it rejected a hostile takeover bid from its competitor Broadcom; and it found itself entangled in the trade war between the US and China when Beijing did not allow Qualcomm to acquire the Dutch group NXP Semiconductors. More recently, the company had to deal with a global shortage of semi-conductors, its primary raw material. "All of these adventures had turned shares of Qualcomm, which were very undervalued, into a potential gold mine," said Stacy Ragson, analyst at Bernstein. Ragson is convinced that the group will regain strength quickly, particularly due to its high exposure to several booming markets, including 5G, highend mobile phones and autonomous vehicles. "Its revenue is expected to grow by nearly 20% in 2022," he said.

  • Foundation: 1992
  • Headquarter: Nanterre (FR)
  • Revenues: € 289 M (2020)
  • Effectives: 200
  • Stock Exchange:

What do cosmetics chain Sephora, retail giant Carrefour and online retailer Elkjøp have in common? All three use the smart electronic price tags developed by SES‑Imagotag in their stores. The French company is the world leader in the Internet of Things for physical stores, or retail IoT. It currently boasts 200 customers worldwide, with more than 20,000 shops using its technology. Electronic shelf labels are cheaper than paper price tags, saving on costs generated by daily price changes. They also streamline inventory management, containing useful information such as sell‑by date and shelf capacity. Via the solution’s cloudbased retail platform, the labels provide an overview of each store’s performance. "SES‑Imagotag is an outstanding leader in a niche market, with considerable growth potential," says René Locher, head of Equity Research Switzerland at Stifel, who recommends buying the share.

  • Foundation: 1910
  • Headquarter: Baar (CH)
  • Revenues: CHF 7.88 BN (2020)
  • Effectives: 25000
  • Stock Exchange:

Nothing can stop Sika. The Swiss chemicals group specialises in construction solutions (waterproofing, bonding, soundproofing). In 2020, when construction sites were grappling with never‑ending health restrictions, Sika was able to maintain revenue close to pre‑pandemic levels, recording only a 2.9% drop in sales. And 2021 is already shaping up to be a record‑breaking year, even with escalating raw material and energy prices. In the first nine months of the year, the Zug‑based manufacturer increased its revenue by 18.2% to CHF 6.86 billion, and its profits by 36.3% to CHF 765.1 million. "Sika has stood out by introducing various new and innovative materials," said Peter Romanzina, an analyst at Vontobel. "For example, the company has introduced a material used to repair damaged bridges instead of destroying and rebuilding them. It’s less expensive and better for the environment." The group’s management targets growth of 6% to 8% for 2022. That would translate into a rise in the share price from the current CHF 370 to CHF 400.

  • Foundation: 1912
  • Headquarter: Pullach im Isartal (DE)
  • Revenues: € 1.53 BN (2020)
  • Effectives: 6900
  • Stock Exchange:

Sixt suffered a severe blow during the pandemic. However, with 205,400 cars in operation worldwide, the German car hire company continues its steady recovery. In the first nine months of the year, the firm generated revenue of €1.63 billion, more than in the whole of 2020. Sixt even logged its best quarter on record in Q3 2021, garnering €799 million in revenue. "Sixt is highly likely to rise in 2022," says Stifel Bank, which recommends buying the share. "The company posts profitable growth in Europe and the US, with a strong balance sheet. Its niche business in luxury car rental brings in a higher margin per vehicle than its competitors in its main markets." Currently trading at around €155, the share could reach as high as €195 in 2022.

  • Foundation: 1954
  • Headquarter: Basel (CH)
  • Revenues: CHF 1.4 BN (2020)
  • Effectives: 7340
  • Stock Exchange:

The global leader in dental implants continues its incredible success. "Each quarter, Straumann is winning market share in a booming sector," said Peter Romanzina, analyst at Vontobel. Its addressable market was worth 10 billion Swiss francs a decade ago, but is now worth 25 billion. The pandemic caused this phenomenon to accelerate even more. "Many people were forced to look at themselves on Zoom all day, and since they couldn’t spend money on holidays, they decided to invest in their teeth," said the analyst. The Basel-based firm also expanded its offer. "It now supplies intra-oral scanners, which make it possible for dentists to create implants directly in their office," he said. Four years ago it also acquired ClearCorrect, a company selling transparent aligners, which are particularly valuable for adults, because they are less invasive and less visible." Romanzina estimates that the company’s revenue will increase 40% in 2021 and reach double‑digit growth in the next eight years.

  • Foundation: 1992
  • Headquarter: Nuremberg (DE)
  • Revenues: $447.4 M (2020)
  • Effectives: 1600
  • Stock Exchange:

When a company decides to digitise its systems, it is usually not a uniform process. "It often ends up being a hybrid infrastructure, in which some parts are placed in the cloud, others are sent out to IT service providers and others remain in the physical world," said Patryk Basiewicz, analyst at FinnCap. The software developed by German company Suse aims to solve exactly these kinds of discrepancies by integrating the various elements into a single management platform. This functions based on the container principle, in that it contains code packets which allow applications from various domains to communicate with each other. The analyst believes that demand for the services that Suse provides will continue to increase as European companies move towards the cloud and automation. Suse generates revenue from management agreements on its software.

  • Foundation: 2003
  • Headquarter: Palo Alto (US)
  • Revenues: $31.5 BN (2020)
  • Effectives: 70757
  • Stock Exchange:

How far will Tesla go? In 2020, the market capitalisation of the electric car manufacturer cleared the symbolic and stratospheric $1 trillion mark. At the time of writing, its valuation is $1.130 trillion, 10 times that of the Volkswagen group. While some analysts believe that this valuation is out of touch with reality, Daniel Ives, an analyst at Wedbush Securities, thinks otherwise. He believes that in 2022 Tesla’s share price could rise from the current $1,140 to attain $1,500, or even $1,800. How is that possible? Two new gigafactories are scheduled to open in 2022, one in Austin in the United States and the other in Berlin in Germany. They are expected to buttress Tesla’s unbridled growth by ramping up production to 2 million vehicles next year, compared with 1 million in 2021 and 500,000 in 2019.

  • Foundation: 1924
  • Headquarter: Courbevoie (FR)
  • Revenues: $140.7 BN (2021)
  • Effectives: 100'000
  • Stock Exchange:

"European oil companies have come along much further than their US counterparts on the path towards energy transition. So we believe they are attractive stocks for 2022," explains Nicolas Simar of NN Investment Partners. "In the short term, they will benefit from the soaring commodity prices to reinvest a vast portion of their revenues in renewable energy." Of those firms, TotalEnergies seems to be in a particularly good position. The French group plans to invest $60 billion over 10 years to increase its renewable energy production capacity from 7 gigawatts (GW) in 2020 to 35 GW in 2025, and 100 GW in 2030. "We aim to be one of the top five renewable power producers by 2030," says Patrick Pouyanné, CEO of TotalEnergies. Currently trading below $50, the share could rise to $70 in 2022 if oil prices remain high.

  • Foundation: 2008
  • Headquarter: San Francisco (US)
  • Revenues: $1.76 BN (2020)
  • Effectives: 4500
  • Stock Exchange:

For the multitude of online apps and service platforms, such as Uber and Airbnb, app users need a quick and flexible service. That’s where Twilio comes in. "When you call your Uber driver, contact your Airbnb host or request customer service from Salesforce, it goes through messaging and telephone solutions hosted in the cloud by Twilio," said Bhavan Suri, analyst at William Blair. Thanks to the integration within these platforms that continue to gain market share, the California‑based company will certainly grow. "It is also expanding into new domains," said the analyst, adding that Twilio tools can also transmit data gathered by respiratory devices used to treat sleep apnoea. "In 2022, I’m expecting growth of nearly 40% and profits of more than $2 billion," he said.

  • Foundation: 2004
  • Headquarter: San Francisco (US)
  • Revenues: $772 M (2020)
  • Effectives: 4000
  • Stock Exchange:

The video-game development platform Unity has become virtually ubiquitous among video game makers. Its multi-platform game engine (for which a pro version licence costs $75 per month) allows makers to quickly create games for all platforms. "Today, 70% of mobile games are created using this interface," said Bhavan Suri, analyst at William Blair. Unity’s technology is used in hits such as Call of Duty, Fortnite, League of Legends and Pokémon Go. It is also used to create more than half of all augmented and virtual reality content that is compatible with Microsoft and Samsung headsets. The company holds a unique position in the market because, unlike its competitors such as Epic Games, it does not develop its own games. "This approach allows Unity to avoid being in direct competition with its clients," said the analyst. Since 2020, it has generated sustained growth, which was up 48% in Q2 2021. But investing in shares is still slightly risky, because it has not yet turned a profit. "But the vast quantities of client data that Unity has will allow it to develop a targeted advertising offer to monetise its platform," predicted Suri.

  • Foundation: 2007
  • Headquarter: Pleasanton (US)
  • Revenues: 2007
  • Effectives: 4500
  • Stock Exchange:

To develop new treatments, the pharmaceutical industry continues to rely on "relatively old" methods, said Bhavan Suri, analyst at William Blair. The California start-up Veeva Systems has revolutionised that by creating a series of cloud-based IT tools that can partly automate Research & Development tasks in the pharmaceutical industry, as well the commercialisation of new treatments. “These innovations can accelerate the process of discovering new molecules and conducting more clinical trials in a shorter period of time,” he said. As proof that its tools are effective, Veeva now has 49 of the 50 largest pharmaceutical groups as clients, including Swiss groups Novartis and Roche. "In Q2, revenue reached $456 million, up 29%, and this trend is expected to continue," said the analyst.

  • Foundation: 2007
  • Headquarter: San José (US)
  • Revenues: $673 M (2020)
  • Effectives: 3000
  • Stock Exchange:

Since the 1990s, companies have fended off cyberattacks by setting up a secure perimeter. That means that only devices located inside the company (the perimeter) can connect to the network. But with so many working remotely these days, a growing number of employees have to connect from outside the perimeter via their personal devices. This is where IT security systems often fall short. To solve the problem, the US firm Zscaler has developed Zero Trust Exchange. This cloud‑native platform basically acts like a gatekeeper when users connect to enterprise services. The platform assesses the conditions under which users connect to the network, such as location, to determine the appropriate level of permissions and restrictions. Zscaler says that it has more than 4,500 customers worldwide, including big names like Coca Cola, Seat, Siemens, LVMH and AkzoNobel. Dan Ives, technology analyst at Wedbush Securities, thinks that Zscaler is simply "the best name in cybersecurity today". The analyst predicts the share will rise from $350 today to $400 in 2022.