When Russia invaded Ukraine, the West imposed punitive sanctions. Banning Russia from SWIFT would hurt some, but not all, of Russia’s major banks. Consumer companies like Apple (AAPL), Microsoft (MSFT), EA (EA), and Nike (NKE) paused sales in the region. That announcement will have minimal impact on results.
Financial and energy firms have too big an exposure to Russia. BP (BP) and Shell (SHEL) have Russian assets they need to sell for pennies on the dollar. Management from both firms failed to recognize Russia’s ambitions. This will cost shareholders.
Exxon (XOM) has a small 1% to 2% impact on earnings as it exits Russia. In addition, it will write down around $4.1 billion worth of assets in Russia. All three energy firms are doing the right thing by exiting the country.
Shell and BP have an easier exit. They do not employ staff in Russia. Instead, they invested in the region and collected dividends from firms.
In the credit card sector, Visa (V) has a 5% revenue exposure to Russia and Ukraine. It halted activity to comply with sanctions. V stock is one of the best fintech firms to own. It has the best prospects and a strong network. Emerging fintech stocks will likely underperform as the world economy weakens.
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