Market Overview

6 Buys And 5 Value Traps Hiding In The European Stock Market

Share:
6 Buys And 5 Value Traps Hiding In The European Stock Market

  • Exane BNP Paribas believes that European equities could come under pressure as the U.S. tightens monetary policy.
  • The firm sees European equity valuations as “stretched” at current levels.
  • Exane BNP Paribas does, however, see potential sources of leadership in European markets headed into 2016.
  • In a new report, Exane BNP Paribas analyst Paul Schneider took a close look at the European recovery and whether European equities have more room to the upside. Schneider also named the firm’s top six Europe stocks to buy and top five stocks to avoid.

    Vulnerable Equities

    Despite recent strength in the European recovery, Schneider isn’t particularly bullish in his European outlook. “The domestic European recovery continues but, as financial conditions tighten in the U.S. and structural challenges restrain EM growth, we think equity markets remain vulnerable, while European valuations offer little comfort at this stage,” he explained.

    Related Link: 10 Stock Ideas From Eastern Europe, Middle East And Africa

    Domestic Strength

    Exane BNP Paribas sees an ongoing recovery in Europe, but it will be based on domestic strength. Schneider is looking toward stocks in media, luxury goods, consumer ingredients, beverages, utilities and real estate for leadership.

    Stock Picks

    Exane BNP Paribas named the following six Outperform-rated European stocks as top picks:

    • AstraZeneca plc (ADR) (NYSE: AZN)
    • Axa SA (ADR) (OTC: AXAHY)
    • Europcar Groupe SA
    • ICAP plc (ADR) (OTC: IAPLY)
    • Munich RE
    • STMicroelectronics NV (ADR) (NYSE: STM)

    In addition, the firm named five Underperform-rated value traps in Europe as well:<

    • BAYERISCHE MOTOREN W (OTC: BAMXY)
    • Sandvik AB (ADR) (OTC: SDVKY)
    • SKF
    • UBS Group AG (USA) (NYSE: UBS)
    • Valeo, SA (EU) (OTC: VLEEY)

    Disclosure: The author holds no position in the stocks mentioned.

    Image Credit: Public Domain

    Posted-In: Analyst Color Long Ideas Short Ideas Eurozone Top Stories Markets Analyst Ratings Trading Ideas Best of Benzinga

     

    Related Articles (AZN + AXAHY)

    View Comments and Join the Discussion!

    Latest Ratings

    StockFirmActionPT
    ALRMImperial CapitalUpgrades58.0
    ANDXSunTrust Robinson HumphreyDowngrades41.0
    CMANomuraDowngrades86.0
    CSLLongbow ResearchUpgrades122.0
    HBANNomuraDowngrades15.0
    View the Latest Analytics Ratings
    Don't Miss Out!
    Join Our Newsletter
    Subscribe to:
    Market in 5 Minutes
    Everything you need to know about the market - quick & easy.
    Daily Analyst Rating
    A summary of each day’s top rating changes from sell-side analysts on the street.
    Fintech Focus
    Your weekly roundup of hot topics in the exciting world of fintech.
    Thank You
    for registering for Benzinga’s newsletters and alerts.
    • The Daily Analysts Ratings email will be received daily between 7am and 10am.
    • The Market in 5 Minutes email will be received daily between 7am and 8am.
    • The Fintech Focus email will be received every Friday between 2pm and 5pm.

    Premera Blue Cross and Express Scripts Agree to Contract Extension

    Gulf Resources To Partner With the People's Government of Daying County in Sichuan Province for the Exploration and Development of Natural Gas and Brine Resources