It may finally be time for European stocks to shine.
Pimco co-founder and Wall Street investment legend Bill Gross recently said that easy money is already being made for investors looking to play the rebound in the global health crisis. Gross says that central bank stimulus will likely be cut in the next few quarters in his latest investment outlook and there is “little money to be made” in global stock markets. However, Gross cited tobacco, banking, and European stocks as three market sectors shunned in the recent rally and could offer an additional advantage to long-term investors. Here are seven European stocks you can buy today, according to CFRA.
SAP (ticker: SAP)
SAP is one of the leading German business application software companies. US technology stocks have been on fire for over a decade, and the tech sector led the 2020 recovery from March lows. SAP has also been performing very well, gaining around 16% since the start of the year. According to analyst Jun Zhang Tan, SAP moves its business from a licensing model to a cloud model, which is expected to help the company reach 80% recurring revenue by 2023. Despite the health crisis, SAP is expected to achieve 87% growth in earnings per share growth this year, according to Tan’s plans. CFRA has a ‘buy’ rating and a target price of SAP stock of $ 176.
ASML Holding (ASML)
ASML is a Dutch market leader in lithography tools used in the semiconductor manufacturing process. The company also performed well in 2020, with a profit of about 22% since the beginning of the year. However, Tan says there are more benefits ahead for the tech stocks, given strong customer demand and growth factors like 5G support and high-power computing. Tan says supply chain disruptions will negatively impact its revenue in 2020, but sales will continue as usual into 2021. As we advance, ASML’s next-generation extreme ultraviolet lithography product is expected to help increase margins, Tan says. CFRA has a “buy” valuation and a $ 435 price target for ASML stock.
AstraZeneca is a British pharmaceutical company that is testing one of the leading coronavirus vaccine candidates. The company recently had to stop trials due to a severe side effect in one trial participant. However, after an investigation, it was quickly resumed with testing in Great Britain. Analyst Wan Nurhayati says investors should not expect the vaccine to be a significant profitable factor, as the company prioritizes affordable distribution. But she says the company’s other new products will help boost revenue in the high-end single-digit percentage in 2020. CFRA has a ‘buy’ rating and a price target of $ 61 for AZN stock.
Total SE (TOT)
The French oil major Total SE is one of the largest energy companies in the world. The oil industry has again been hit hard by a sharp drop in global travel, but analyst Jia Man Neoh believes Total is an attractive opportunity. Neoh says Total has a long track record of growing steadily regardless of the external environment. The company also has a strong pipeline of on-going project startups and a healthy balance sheet with a debt ratio of less than 28%. CFRA has a “strong-buy” rating and a target price of $ 43 for the TOT stock.
Sanofi is a global pharmaceutical company headquartered in France. Nurhayati is optimistic about the Dupixent monoclonal antibody drug, which treats allergic conditions such as eczema and asthma. She says Dupixent will help offset some of the adverse effects of the decline in Sanofi’s diabetes unit. Sanofi is also aiming for growth in the compounds’ annual sales in the mid-to-high figure in its vaccine unit through 2025. Nurhayati says the company’s goal of 30% operating margin by 2022 is probably within reach now that it’s slashing budgets for diabetes and cardiovascular research. CFRA has a ‘buy’ rating and a price target of $ 56 for SNY stock.
ABB is a Swiss technology company specializing in electrification, robotics, and industrial automation. According to analyst Varun Venkatraman, ABB’s decision to sell its Power Grids business to Hitachi for $ 6.85 billion in July has ABB well-positioned to improve its margins and generate long-term revenue growth for companies. Investors. Venkatraman said the deal’s cash proceeds would be used to buy back own shares, boosting earnings per share. Furthermore, he says ABB is a leader in the long-term growth market for industrial automation. CFRA has a ‘buy’ rating and a target price of ABB shares of $ 28.
Vodafone Group (VOD)
Vodafone is a British multinational telecommunications company with nearly half a billion customers in more than 30 countries. According to analyst Adrian Ng, Vodafone’s diverse business profile will help it drive long-term growth. Besides, he says the company has expanded its margins for five consecutive years thanks to its Fit for Growth cost-cutting initiative. Like its American telecom counterparts, Vodafone also pays a sizable 7.5% dividend. Ng expects earnings per share growth of 25% in fiscal 2021 and 42% growth in fiscal 2022. CFRA has a ‘buy’ rating and a price target of $ 16 for VOD stock.