In today’s global marketplace, mounting uncertainty, the threat of US tariff wars, and a strong US dollar have prompted investors to reassess the resilience of their portfolios.
With President Trump’s tariff measures once again under the spotlight, the impact on companies reliant on international supply chains is palpable.
However, not all businesses are equally exposed.
Certain businesses – particularly those driven by digital innovation, recurring revenue streams and robust cash flows – are well insulated from tariff-induced disruption.
A strengthening US dollar should also benefit companies that generate a significant portion of their earnings overseas, converting foreign revenue favourably into sterling.
Here we explore three stocks that, by virtue of their unique business models and international footprints, look poised to weather a tariff storm.
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Investing in an individual company isn't right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you're investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
Ashtead
With four downgrades in the last five quarters, Ashtead has garnered a reputation for failing amid slowing growth in the US real estate market. We think Ashtead looks well insulated from a US tariff storm, and weak sentiment provides an opportunity.
A more cautious investment approach – following a phase of arguably overzealous expansion – has translated into improved cash flows and a shift towards preserving capital. We think this presents an opportunity.
North America currently remains a prime growth engine, buoyed by structural tailwinds like onshoring supply chains, government-led infrastructure initiatives and measures to boost chip manufacturing. Rental prices have continued to be robust and are expected to hold their strength, though a weaker second-hand market means lower prices when it comes to selling used equipment.
Ashtead isn’t in the import or export arena, helping to reduce its exposure to tariffs. It's also considering moving its primary stock market listing to the US, aligning with where it generates most of its revenue.
Ashtead’s scale, market expertise, and focus on cash retention help support a promising medium-term outlook. However, near-term headwinds remain, and the market will need clear signs of improvement before sentiment turns.
London Stock Exchange Group (LSEG)
LSEG is more than just a stock exchange – it’s a leader in financial data and technology. LSEG earns most of its revenue from providing vital tools and services for financial professionals, like data, analytics, and clearing services.
This diverse range of income is a positive and provides some shelter from tariffs and trade wars. For example, if US tariffs lead to a stronger US dollar (which has been the case so far), LSEG could see a boost in earnings because of its global reach.
What’s more, LSEG’s business is less impacted by global trade tensions compared to companies that rely on physical goods.
Instead, LSEG focuses on growing sectors like data and analytics, which are in high demand, especially as more financial institutions turn to cloud-based solutions and automation.
LSEG has been investing, and we think the fruits of that labour are starting to shine through.
However, there are still risks, from regulatory challenges to fierce competition in the US.
The electronification of trading, embedding tech into capital markets, and growth in demand for data and tools to analyse it are all areas that LSEG looks well-placed to benefit from.
But some of that has already been priced in, and if it wants to continue bridging the valuation gap to US peers, it needs to deliver.
RELX
RELX has proven it’s capable of weathering economic headwinds so far and stands well-placed to capitalise on a stronger US dollar. It uses data to help businesses manage risks, support scientific research, provide legal services, and organise big events and exhibitions.
It generates a significant portion of its revenue overseas, mainly in the US. That’s an advantage when the US dollar is strong and is converted back to sterling for calculating profit.
A key driver of growth is RELX’s digital offering, which accounts for 84% of group revenue.
The company’s proprietary, hard-to-replicate data and advanced analytics provide an enviable competitive moat, delivering valuable insights to top insurers, law firms and academic institutions.
More than half of its income stems from recurring subscription models, ensuring stable and predictable cash flows even during periods of volatility.
Post‐COVID, the Exhibitions segment has shown encouraging recovery, bolstering margins. Yet, it’s the ongoing digitisation and innovative use of artificial intelligence (AI) – exemplified by the rollout of Lexis+ AI – that presents the greatest promise for future growth.
RELX has a robust balance sheet, high-quality earnings and is committed to shareholder returns through dividends and share buybacks.
But there's no such thing as a free lunch, and the valuation at around 30 times expected earnings adds pressure to deliver and increases the chances of short-term volatility. Remember no shareholder returns are guaranteed.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss. Yields are variable and not guaranteed.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.