The war between Russia and Ukraine has led to a slew of sanctions imposed on Russia from Europe as well as the United States. On Tuesday, President Biden in his State of the Union address warned Russian President Vladimir Putin that he had “no idea what’s coming,” according to Reuters.
The sanctions imposed on Russia by the European Commission, France, Germany, Italy, the UK, Canada, and the U.S., include freezing and seizing assets of Russia’s elite including the oligarchs, and removing select Russian banks from SWIFT.
SWIFT is an acronym for Society for Worldwide Interbank Financial Telecommunication, and it is a secure platform that allows banks and other financial institutions to exchange information about monetary transactions, including money transfers.
Cutting off Russia from this system would result in the country being unable to access its overseas reserves, or more specifically, the payments for its exports of oil and gas. Other sanctions imposed by the U.S. on the Russian Central Bank have included prohibiting Americans from engaging in any transactions with the Russian Central Bank.
While these sanctions could cripple the economy of Russia, what about the companies who have invested in Russia, or those for whom a portion of their revenues comes from that country? Should investors dump these stocks or stay invested? What is the analysts’ consensus regarding these stocks?
To answer some of these questions, we combed through the TipRanks database to look at such stocks. What’s more, we stacked these stocks that are exposed to the war between Russia and Ukraine against each other, using the TipRanks stock comparison tool, and looked at some of the key indicators for each stock, including the consensus price target and analysts’ recommendations.
Let’s take a look at these stocks.
Kinross Gold Corp. (NYSE: KGC)
Kinross Gold is a Canadian gold mining company with mines and projects in the U.S., Brazil, Russia, Mauritania, Chile, and Ghana. The company has operated in Russia for the past 25 years and its operations are in the Russian Far East, approximately 7,000 kilometers away from Ukraine.
This year, Kinross anticipates 13% of its gold production coming from Russia. On February 23, KGC announced that “its operations in Russia are operating according to plan and currently remain unaffected by U.S. sanctions.”
However, this reassurance did not seem to calm Kinross investors, as the stock has fallen by around 6% in the past five days.
Nonetheless, top-rated analyst Carey MacRury from Canaccord Genuity remains bullish on the stock and the company’s growth profile. However, the analyst lowered the price target on the stock from C$11.50 to C$10.50 or $8.28 (59.6% upside) to better reflect the higher costs required by KGC to achieve growth.
Other analysts on Wall Street echo MacRury and are upbeat about the stock, with a Strong Buy consensus rating based on 10 Buys and 1 Hold. The average Kinross Gold stock prediction is $8.17, which implies upside potential of approximately 57.4% to current levels for this stock.
Philip Morris International (NYSE: PM)
Philip Morris International is a tobacco company whose product portfolio consists of cigarettes and smoke-free products, including vapor and oral nicotine products, sold outside the United States.
On February 25, the company announced the suspension of its operations in Ukraine temporarily, including at its factory in Kharkiv. Besides for its factory, Philip Morris has around 1,300 employees in Ukraine.
Last year, Ukraine accounted for around 2% of the company’s total cigarette and heated tobacco unit shipment volume and comprised less than 2% of PMI’s total net revenues. Both Russia and Ukraine currently account for 8% of the company’s revenues.
This stock has also been affected by the conflict between Ukraine and Russia and has dropped 7.1% in the past five days.
However, Wall Street analysts, including four-star analyst Gaurav Jain from Barclays, are optimistic about the stock, with a Strong Buy consensus rating based on 3 Buys and 1 Hold. Analyst Jain has maintained his Buy rating with a price target of $120 (18.3% upside) on the stock.
The analyst’s price target is higher than the average Philip Morris stock prediction of $115, which implies upside potential of approximately 13.4% to current levels for this stock.
Even investors on TipRanks are very positive about Philip Morris with 23.3% of 568,488 portfolios having become invested in the stock in the past 30 days.
Mohawk Industries (NYSE: MHK)
Mohawk Industries is a flooring company whose products can be used in both residential and commercial spaces. The company has operations in Russia, and currently, 4.3% of its sales come from Russia and Ukraine. This year, the company plans to ramp up its porcelain tile manufacturing capacity in Russia with a new production line and another production line planned in 2023.
While the company’s business performance improved significantly in 2021, the stock has fallen by 13.5% in the past month.
Are analysts bearish about the stock? It doesn’t seem so. The most recent bullish rating on MHK came from J.P. Morgan’s Michael Rehaut on February 15, who maintained a Buy rating and a price target of $216 with an upside potential of 57.6%.
Other analysts on Wall Street, however, are sidelined on the stock with a Hold consensus rating based on 3 Buys, 5 Holds, and 2 Sells. The average Mohawk Industries stock prediction of $178.10 indicates over 29.9% upside potential for the stock.
PepsiCo (NASDAQ: PEP)
PepsiCo is a beverage and snacks company with an expansive portfolio of brands including Lays, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. The beverage giant also has operations in Europe, including Russia and Ukraine. Currently, 4.4% of PEP’s revenues come from Russia and Ukraine.
While the company reported strong results in Q4, its weak outlook for FY22, citing inflationary pressures, has dragged down the stock. PEP’s shares have dropped 7.5% in the past month.
When it comes to the analyst outlook for the stock, most recently, Bonnie Herzog from Goldman Sachs rated the stock a Buy on February 23 with a price target of $180 (10.9% upside) on the stock. The analyst cited an “upbeat assessment about PEP’s l.t. [long term] growth opportunities on both the top & bottom line,” following a company presentation.
Other analysts on Wall Street are cautiously optimistic on the stock with a Moderate Buy consensus rating based on 8 Buys and 7 Holds. The average PepsiCo stock prediction of $180.73 indicates over 11.4% upside potential for the stock.
Moreover, PEP has a “Perfect 10” Smart Score, supported by positive sentiment by bloggers and investors, as well increased purchases by hedge funds, indicating that the stock is highly likely to outperform the market.
Fortinet (NASDAQ: FTNT)
The war between Russia and Ukraine has given rise to the possibility of increased cyberattacks. This has resulted in increasing interest among investors in cybersecurity stocks, with Fortinet among them.
Indeed, top-rated Wedbush analyst Daniel Ives believes that the cybersecurity sector could see additional growth between 200 and 300 basis points due to the crisis in Ukraine, given that it is “already poised to increase 20% YoY in 2022 given the accelerated move to the cloud and heightened threats facing enterprises/governments.”
Fortinet develops and sells cybersecurity solutions, and the stock has shot up 12.2% in the past five days alone. Currently, 2.5% of Fortinet’s revenues come from Russia and Ukraine.
Wall Street analysts are cautiously optimistic about the stock with a Moderate Buy consensus rating. The stock has received 16 analyst ratings over the past 3 months with 7 Buys, 8 Holds, and 1 Sell, including a Buy rating from Daniel Ives on February 4. The average Fortinet stock prediction of $354.13 indicates over 4.8% upside potential for the stock.
Sberbank Rossii OAO (OTC: SBRCY)
Sberbank is a state-owned Russian banking and financial services company headquartered in Moscow. The company has been severely affected by the economic sanctions, with its European subsidiary facing bankruptcy in the wake of sanctions, according to the European Central Bank.
In the past five days alone, the stock has tanked 89.6%. The bearish sentiment on the stock is reflected in the consensus analyst rating of Moderate Sell on TipRanks. In the past 3 months, only one analyst, Hans Engel from Erste Group, has rated SBRCY, giving it a Sell on February 24.
Sylvamo Corp (NYSE: SLVM)
Sylvamo is a manufacturer of uncoated paper with mills in Europe, Latin America, and North America. The company has its headquarters in Memphis, Tennessee, but Russia and Ukraine are important markets for the company.
Currently, 16.6% of Sylvamo’s sales come from Russia and Ukraine. The effects of the conflict between Russia and Ukraine has led to the stock falling 8.9% in the past five days.
Most recently, an RBC Capital analyst, Paul Quinn, who is rated a five-star analyst on TipRanks, raised the price target from $34 to $40 (20.2% upside), and maintained a Hold rating on the stock on February 14. While the analyst was upbeat about the company’s Q4 results, the risks associated with the company’s international markets, including Russia and Brazil, kept him sidelined on the stock.
In the past 3 months, only two analysts have covered the stock, with a consensus rating of Moderate Buy based on 1 Buy and 1 Hold. The average Sylvamo stock prediction of $39 indicates over 17.2% upside potential for the stock.
Arconic (NYSE: ARNC)
Arconic is a global supplier of aluminum sheet, plate, and extruded products for the aerospace, automotive, commercial transportation, defense, industrial, and building and construction industries.
Shares of ARNC have tanked 11.9% in the past five days, as the company has exposure to both Russia and Ukraine. 9.4% of Arconic’s sales come from Russia and Ukraine.
Wall Street analysts, however, are cautiously optimistic about the stock, with a Moderate Buy consensus rating. This rating is based on 2 unanimous Buys. The average Arconic stock prediction of $40 indicates over 42.7% upside potential for the stock.
Moreover, the stock has a Smart Score of 9 out of 10, supported by the very positive sentiment by bloggers and investors and increased purchases by hedge funds, indicating that the stock is highly likely to outperform the market.
Yandex (NASDAQ: YNDX)
Yandex is a Russian technology company, primarily catering to Russian and Russian-language users. The company offers search and information services and navigation products, and has also expanded into e-commerce, online entertainment, cloud computing, and other markets.
Yandex could be adversely impacted by the sanctions imposed on Russia. Investor concerns regarding this have been reflected in Yandex’s stock price, which has slid 48.3% in the last five days alone.
Yet Wall Street analysts are still bullish on the stock, as indicated by the most recent Buy rating on the stock by Citigroup analyst Catherine O’Neill on February 17. Over the past 3 months, 3 Wall Street analysts have rated the stock a buy with a consensus rating of Strong Buy. The average Yandex price target of $75.33 represents almost 300% upside potential over the next 12 months.
However, none of the top-performing analysts have recently rated the stock.
Ozon Holding (NASDAQ: OZON)
Ozon Holding is frequently referred to as “the Amazon of Russia,” as the company is an e-commerce platform based out of Russia. The company connects and facilitates transactions between buyers and sellers, and also sells products directly to its own buyers.
Shares of this Russian company have also felt the implications of the war between Russia and Ukraine, as the stock has dropped 31.2% in the past five days.
However, out of three Wall Street analysts who have rated the stock in the past 3 months, only one has said Buy, while two have said Hold, with a consensus rating of Moderate Buy. The average Ozon Holding stock prediction of $33.33 indicates over 187% upside potential for the stock. Most recently, Sebastian Patulea of Jefferies initiated a Hold rating on Ozon on February 7.
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