Ian Salisbury
The U.S. dollar is falling fast, that could help provide a tailwind for multinationals that get a big share of their sales abroad.
Fears of a tariff war have been taking a toll on the greenback. The U.S. dollar index, which measures the strength of the dollar against a basket of major currencies, has fallen 3.5% over the past four days, its worst four-day stretch since November, according to Dow Jones Markets Data.
The dollar's decline against the Euro has been even more dramatic, with European common currency gaining 4.4% relative to the dollar.
Investors can blame the U.S. retreat from European military leadership, combined with efforts to curtail U.S. government spending, both of which contrast with recent European efforts to bulk up defense spending, according to Macquarie analysts Thierry Wizman and Gareth Berry.
The pain may not be over. "Can the EUR rise even more?" the analysts wrote in a note Thursday. "It can if the headlines pertaining to European assertiveness and fiscal expansiveness don't cease, or if headlines pertaining to U.S.'s retreat and fiscal unassertiveness don't end."
The weaker dollar can be good news for investors who own international stocks, since it increases the value of foreign profits, when translated back into U.S. dollars. It could also benefit U.S. companies that earn a large share of their revenue abroad.
It's worth noting that tariffs could undermine the weak dollar's potential benefits to U.S. companies if they wind up raising costs for domestic manufacturers, or if retaliatory tariffs hurt U.S. exports.
Still, it's worth taking a look at which companies could benefit the most. To that end, Barron's asked FactSet to help us screen for the S&P 500 companies which realize a large share of their sales abroad and boast average or below average forward price-to-earnings ratios.
The list includes several companies Barron's has recently recommended, including Slumberger, On Semiconductor and Newmont.
Las Vegas Sands / LVS
Total sales: $11 billion
Foreign share of sales: 100%
Forward Price/Earnings multiple: 17
Lam Research / LRCX
Total Sales: $16 billion
Foreign share of sales: 93%
Forward P/E multiple: 20
Philip Morris International / PM
Total sales: $38 billion
Foreign share of sales: 88%
Forward P/E multiple: 21
Applied Materials / AMAT
Total sales: $28 billion
Foreign share of sales: 86%
Forward P/E multiple: 16
Newmont / NEM
Total sales: $19 billion
Foreign share of sales: 85%
Forward P/E multiple: 13
BorgWarner / BWA
Total sales: $14 billion
Foreign share of sales: 84%
Forward P/E multiple: 7
Jabil / JBA
Total sales: $27 billion
Foreign share of sales: 83%
Forward P/E multiple: 15
On Semiconductor / ON
Sales: $7 billion
Foreign share of sales: 82%
Forward P/E multiple: 16
SLB (Schlumberger) / SLB
Total sales: $54 billion
Foreign share of sales: 82%
Forward P/E multiple: 11
FMC / FMC
Total sales: $4.2 billion
Foreign share of sales: 76%
Forward P/E multiple: 11
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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March 06, 2025 14:42 ET (19:42 GMT)
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