Last week’s decision made by the United Kingdom to leave the European Union sent global markets sharply lower, but there were several U.S.-based stocks with larger European-exposure that were absolutely hammered in trade after the decision.
In the last two trading sessions after the Brexit decision was made, the following stocks lost more than 10%, and could continue to feel the effects of the decision for the foreseeable future due to heavy exposure to the region:
Manpower Group Inc. MAN
A global leader in the employment services industry, Manpower Group Inc. suffered heavy losses after the Brexit decision, with its shares plunging more than 21.5% in its last two trading sessions. The company believes that the UK’s exit from the EU will have a significant effect on its business because EU workers will not be able to move freely to the UK.
Nearly two-thirds of the company’s revenue comes from Europe and the UK, with the UK attributing nearly 10% of the company’s total revenue. This dependence on the area leaves the company incredibly vulnerable to regulations and changes enforced as a result of the Brexit, and could hurt its stock even further.
Invesco Ltd. IVZ
Atlanta-based asset management firm Invesco Ltd. also saw a major drop in its share price after the Brexit decision, as IVZ fell more than 20% in its last two trading sessions. $1.3 billion, nearly a quarter of the company’s revenue, came from the UK last year, leaving IVZ vulnerable to feared economic problems that may arrive in the region.
Invesco was also downgraded by Citigroup C on Monday, from buy to neutral, which also caused the stock’s plunge. The group’s price target was lowered from $38 down to $27, and said the stock was likely “dead money” as investors consider the effects of Brexit.
The Priceline Group Inc. PCLN
Online travel and restaurant reservation provider Priceline Group Inc. also saw its shares slide after the Brexit decision, as PCLN sank 15% lower in its last two trading sessions. The company was not alone, as many travel stocks saw major sell-offs after the decision, though PCLN saw one of the worst drops of all.
Approximately 15% of Priceline’s bookings are estimated to come from the United Kingdom, leaving the company susceptible to a drop in travel in the region. Priceline also owns Dutch-based Booking.com, which does a great deal of business in the UK and Europe, which could also see a decline in business and hurt Priceline’s revenues.
American Airlines Group Inc. AAL
Although its shares were up nearly 5% Tuesday in early-afternoon trading, American Airlines Group Inc. saw a major sell off after the Brexit decision as well, with its shares sinking 17% in its last two sessions. Nearly 20% of the company’s revenue came from the Atlantic region in the last 12 months, which includes the UK, and flights to the UK account for 6.2% of AAL’s capacity.
The company also has a joint venture with UK flag-carrier British Airways, further exposing the company to the region. Unfortunately for AAL and other airlines with heavy traffic to the UK, the International Air Transportation Association estimates that Brexit could reduce UK air travel passenger volume by 3%-5% by 2020 on decreased GDP figures.
Though these stocks are all based in the US, each has significant exposure to the UK in terms of their businesses and revenues, leaving each vulnerable to any economic downturn or regulation changes in the region. While the effects of Brexit and the direction of the UK’s economy on these companies is yet to be determined, it will definitely be something for investors to watch in the coming months.
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