Forget the American “Grand Grand Seven”. The spotlight is now on the so-called “granola” of fast-growing stocks on European stock markets. Goldman Sachs coined the term when introducing 11 European high-growth stocks in 2020: GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, AstraZeneca, SAP and Sanofi.
Goldman recently noted that while Grand Seven has dominated the U.S. market in recent years, Granola has dominated in Europe, accounting for 60% of European stock gains last year. Similarly, strong growth has made Granola, like Grand Seven, significantly more expensive than its European peers.
Still, granola is quite different from the great seven varieties in America.
Of the latter, all but one (Tesla) are stocks with market capitalizations of $1 trillion, while the most valuable of the granola stocks is pharmaceutical company Novo Nordisk, with a market capitalization of around €540 billion.
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The Big 7 in the US are essentially technology stocks (not everyone agrees that electric car maker Tesla deserves that title, but that’s a separate debate). In contrast, Granola is made up of several sectors and its members range from pharmaceutical companies and luxury goods makers to food companies. Still, it’s true that, like the US, European stock markets are becoming increasingly concentrated. Granola now accounts for about a quarter of the market capitalization of the Stoxx 600 index, and we can expect to hear more talk about a European “grand 11” in 2024.
