Cowen Research Publishes Annual Themes Outlook
Explores The Trends Impacting Investment Opportunities In The Year Ahead
Cowen Inc. (NASDAQ:COWN) (“Cowen” or the “Company”), today announced the release of Themes 2023. This annual handbook, assembled by the Company’s Research department, identifies themes in which Cowen’s collaborative approach and sector knowledge provide insights into the policies, trends and developments that are shaping industries. As in previous years, Themes 2023 builds off Cowen’s flagship Ahead Of The Curve® Series, the preeminent equity and policy research product for institutional investors and corporate decision makers.
Robert Fagin, Cowen’s Global Head of Research noted, “Cowen’s Themes publication leverages our analytical expertise and proprietary research and is one of Cowen’s most anticipated publications each year. Our signature collaborative approach provides crucial insights and perspective. Cowen has made the integration of ESG and sustainability factors central to our research agenda, investing heavily in our team and data capabilities to help investors separate hype from investability.”
Each theme featured is accompanied by corresponding Cowen reports and events that readers can reference for additional background and depth.
“2022 marked another year of global disorder, leading to disruptions across multiple industries. Inflation has also surged, driven by product shortages resulting from global supply chain challenges, strong consumer demand, and low unemployment. Numerous geopolitical rifts and elections further increased market tension and uncertainty,” said Bill Bird, Cowen’s Head of Thematic Content. “Amidst this tumultuous environment, Cowen Research has sought to be a reliable and consistent source of stable and prescient thematic research. Our fundamental analysts work together to identify cross-sector themes, and rise above the noise to spot opportunity and risk. In addition, we incorporate input from our policy experts at Cowen’s Washington Research Group to provide unique views on the impact of regulatory and political agendas.”
The table below summarizes the 14 areas of focus addressed in Themes 2023.
|THEME||SUMMARY OF COWEN’S INSIGHT|
|Deglobalization & Reglobalization||The world is at the advent of a new era of economic statecraft, which will have broad implications for trade patterns and capital flows, mobility, control over critical technology inputs, energy costs, and margins. Nations are focused on securing critical supply chains. New legislation in the U.S., for example, will support significant domestic technology innovation and investment.|
|Supply Chain||Geopolitical and COVID-induced disruptions are reshaping supply chains. Cowen sees a paradigm shift with dramatic reshoring, favorable implications for North American transportation and logistics, robotics and automation, and autonomous trucking.|
|Energy Transition||Cowen believes global efforts to achieve greenhouse gas reductions and energy independence will result in numerous energy transition pathways. We see opportunities in lithium, electric vehicle charging, small modular nuclear reactors, and bridge fuels such as renewable diesel. Unprecedented levels of new, U.S. investment will benefit multiple sectors, including solar, clean hydrogen, carbon capture and sequestration, grid infrastructure, and battery manufacturing.|
|Inflation & The Consumer||Cowen’s proprietary surveys and data show some signs of inflation moderation. At the same time, a tight labor market remains an issue, and it is reasonable to believe that some components of inflation will be part of the “new normal,” including the adoption of ESG standards, deglobalization and reshoring, and energy independence.|
We see a bifurcated consumer market in which low-income and middle-income consumers feel the highest pressure. Financial conditions for this cohort could certainly worsen if Fed tightening drives unemployment.
|Mobility||The $7 trillion transportation industry is ripe for transformation. We see value shifting to semiconductors, sensors, and battery materials. We also see the adoption of EVs continuing to rise as choice for consumers increases, battery range improves, tax credits elevate, and charging infrastructure becomes more robust. Access to lithium for batteries is an acute issue, and securing supply will be critical.|
|Therapeutics, Tools & Digital Innovation||Innovation in the biotech industry has shown no signs of slowing, and Cowen believes that artificial intelligence and synthetic biology tools hold the potential to further accelerate the pace of innovation. Cowen predicts that 2023 will see a surge of data, trial starts, and commercial milestones.|
|Technology Innovation||Cowen sees several technologies ushering in the next wave of disruptive growth and innovation, including quantum computing, compound semiconductors, customer data platforms, data-driven drug discovery, and web 3.0 payments solutions.|
|Robotics & Automation||Cowen believes robotics is set for increased adoption and will play a multi-faceted role, including in hardening supply chains. Robotics will also increasingly be used as tools to fight climate change, drive human productivity, increase revenue growth, and address structural labor market tightness.|
|Digital Assets||Cowen believes crypto and digital asset platforms will come under increased regulatory scrutiny and that companies with the most advanced compliance infrastructure will be advantaged. We see particularly promising crypto use cases in global remittance, where fees reached $50 billion in 2022. |
|Future of Health Care Delivery||Cowen believes payment model innovation, site-of-care delivery transformation, and the digital data revolution are three investable health care mega-trends. We expect our value-based care consolidation thesis will continue to play out after this year’s stock corrections.|
|ESG||Despite challenges in 2022, global investors’ scrutiny of ESG factors continues to grow. Going forward, we see greater focus on a wider range of ESG considerations and the factors deemed material to driving long-term value. Cowen also sees increased ESG reporting standardization being driven by regulators.|
|Future of Public Health||In Cowen’s proprietary surveys of medical experts, only half of respondents believed we are better prepared for future pandemics. In the U.S., pandemic preparedness will be elevated as a strategic priority, and processes at agencies like the CDC will be revamped.|
|Future of War||Russia’s acceleration of its war with Ukraine has led to governments rethinking their spending priorities. For example, in a push to develop next-generation weapons like hypersonic missiles and space-based systems, U.S. Department of Defense spending on research & development is surging to its highest level in 70 years. Cybersecurity and biosecurity are additional areas seeing dramatic spending increases.|
|Cannabis||Cowen believes there remains a significant opportunity to transition a large illicit market that is currently two times larger than the legal market. We believe deflationary pressures could persist for another year but that the industry can weather its growing pains through continued expansion into new adult-use markets, consolidation, and incremental regulatory relief. We see U.S. federal legalization of cannabis as a question of “when,” not “if.”|