Consumer, Brands & Retail Q1 2022 Top Picks: AB Inbev, adidas, Carrefour, Delivery Hero, EssilorLuxottica and LVMH Sector view: high market share and pricing power are key Investors will likely agree with us that in the consumer industry, high market share and brand awareness are key as they are very often synonymous with pricing power and outperformance in challenging macro considering the Covid-19 pandemic, as well as higher raw mat and transportation costs. The key differentiating factor supports our choices for the Q1 Top Picks list: they all foster leading brands within their respective businesses/categories. Our favourite stocks for Q1 2022: adidas Group (Buy, TP: EUR335 vs. EUR330): even though it is a contrarian idea at this stage, we believe that ADS will maintain its initial roadmap for 2022 implied in the “Own the Game” strategic plan, with a gradual acceleration throughout the year as supply chain disruptions ease off and the action plan to revitalize momentum in China deliver its results. The sharp correction over the second half of Q4 due the exponential Omicron surge now leads to attractive entry points to play these gradual acceleration in sales and earnings trends in 2022 and 2023. EssilorLuxottica (Buy, TP: EUR195): current profit-takings on stocks with high valuation multiples create appealing entry price points as EL is surely one of the most defensive stock within our universe as it did not cope with supply chain disruptions or inflationary trends. We believe that investors have well-flagged the near-term dilutive impact from the integration of GVNV and would rather focus on the synergy plan that should be unveiled soon. Synergies, efficiency gains and a favorable price-mix will be key margin enhancers going forward. It is worth noting that our TP is currently based on conservative synergy assumptions. LVMH (Buy, TP: EUR835): We add LVMH in our Top Pick list for Q1 22. The reasons are almost the same than for Q4 21: best luxury brands in our universe (with a Must Have in each of its division as Hennessy, Veuve Clicquot, LV, Dior, Bulgari, Tiffany), positive prospects (both top line and profitability), still potential improvement in some businesses in 2022 (Perfumes & Cosmetics, Selective Retail…), share price upside (15%) despite 42% increase in 2021. We prefer LVMH as Richemont and Hermès have enjoyed a better Q4 stock performance (+38% and +28%). Carrefour (Buy, TP: EUR20): We believe Carrefour is definitely an M&A play for 2022. Even in the absence of any formal offer before the French elections in April 2022, rumours will multiply by then and share price should gradually close the gap with the rumoured all-cash EUR23.5/share bid offer being prepared by Auchan in partnership with PE funds. If it is not Auchan, we expect other players to return (i.e. Couche-Tard) or emerge (i.e. other PE funds). Delivery Hero (Buy, TP: EUR177): Delivery Hero has embarked on a refocus since Dec 2021, choosing to preserve the path to profitability rather than the expansion into new large countries in order to reassure shareholders and reduce the risk of a hostile takeover. This new approach should ensure a higher FY 2022 EBITDA than initially feared (i.e. -EUR490m we believe vs. -EUR550m expected by consensus) while ensuring that the breakeven in 2023 is still within reach. AB Inbev (Buy, EUR65): On average the brewer with the highest average market share is AB InBev with about 60%, more than double the 25%-30% range for Heineken and Carlsberg. Hence, we believe that AB InBev is best positioned to further raise prices and name it our top pick. Furthermore, the stock is trading at only 18.6/16.3 2022/23 earnings compared to 24.6/21.0 for Heineken, 21.5/19.2 for Carlsberg and 25.1/22.8 for Royal Unibrew.