In current times, value is one of the most important aspects determining the favorable outcome of international investing. It has been years since financial experts and advisors have been recommending traders and investors to invest a part of their portfolio in overseas stocks to mitigate risk. This advice works particularly at the current times because European countries are recovering more rapidly from the Covid 19 than the United States. At the same time, a larger GDP recovery is anticipated for Europe with 6% growth. On the contrary, the GDP growth for the US is anticipated at 5%. Another reason to invest in European stocks right now is the weakness imbibed in the US dollar which makes European stocks more attractive. Let us look at the top European stocks for immense growth in 2021.
The first in the list of top European stocks is none other than SAP. SAP is a leading software stock based on German enterprise applications. In the United States, technology-related stocks have been on the top edge for a long period of time. The tech stocks have shown immense recovery in 2020 from the lows they garnered in March.
Tap has also been a robust performer throughout the year. It has gained about 16 % till date. According to the analyst Jun Tan, 7 is transforming its businesses from just being a licensing model to becoming a cloud model. This will aid the company to achieve 80% revenue till the year 2023.
SAP is predicted to achieve about 87% earnings per share of growth this year despite the health crisis. A price target of 176 dollars has been advised by CFRA.
ASML Holding (ASML)
ASMLl holding is another one of the top European stocks for 2021 due to its excellent performance. ASML is a market leader in Dutch for lithography tools data used in the manufacturing process of semiconductors. The company performed magnificently in 2020 by achieving a gain of 22 % to date. According to the analyst Jun Tan, ASML is yet to witness more beautiful outcomes in the coming years. The reason for this is the growth factors like high powered computing, 5G support system and increasing customer demand.
But the disruptions in the supply chain may produce a negative impact on the demand and the revenue. But the sales will be pushed positively in 2021. ASML is soon to launch its ultraviolet lithography product powered with next-generation features that will boost the sales and margins for the company. CFRA rates this European stock as a “buy” at a target price of 435 dollars.
Another in the list of top European stocks for 2021 is AstraZeneca. It is a UK based pharmaceutical company and is responsible for the test of one of the Covid vaccine candidates. Due to one of the trial vaccines causing detrimental side effects, the company has to stop its trials. After an investigation, the testing was quickly resumed in Britain. But since the company is looking for an affordable distribution of vaccine, it cannot be a core profit facilitator for the company. However, the new products of the company will help in the growth of revenue in 2021. CFRA depicts a buy rating for the stock at a price of 61 dollars.
Total SE (TOT)
Total SE is one of the largest oil and energy companies in France. The whole oil industry is facing a significant decline due to a loss in global travel. But according to the analyst Jia Man Neoh, Total SE is one attractive opportunity for value investors. Despite the external situations and conditions, Total SE has been consistent in delivering steady and stable growth. The company also has projects and startups in line with a healthy balance sheet (with a ratio of less than 28%). CFRA gives a “strong-buy” signal for this top European stock at a target price of 43 dollars.
Specialising in electric products, industrial automation, and robotics, ABB is a Swiss technology company. According to many analysts, the decision of ABB it’s business of power grids to Hitachi for about 6. 85 billion dollars proved beneficial. This is because it has well-positioned ABB to render long term revenues for its investors and improve the margins. The funds from the Hitachi deal is to be used for share buybacks that will increase the value of earnings per share. Apart from that, ABB is one of the pioneers in industrial automation. This adds a double tick to the company. Therefore CFRA gives it a “buy” signal at a target price of 28 dollars.
Vodafone is Britain based telecommunication company that makes it to the list of top European stocks for 2021. Why? Because of the volume of customers, it caters to across the globe. The company has about half a billion consumers across 39 major countries. According to the analyst Adrain Ng, the long term growth of Vodafone lies in its diversity. The company was able to increase the margins for five years, back to back. This is due to its initiative of fit for growth cost savings. Vodafone pays about 7.5% dividend just like most of the American telecom companies. A growth of 25% earnings per share is estimated in 2021 and a growth of 42% in the year 2022. A buy rating is given to the stock by CFRA with a target price of 16 dollars.
Red Electrica (RDEIY)
Red Electrica works for electric transmission grids in Brazil, Peru, Chile, and Spain. In Spain, the company also owns a telecommunications network that covers about 50,000 kilometres. The company recently also acquired a major stake in Hispasat SA. The company operates in Spain and Portugal as a satellite infrastructure operator. The company is also planning to diversify further in technology services to balance unregulated and regulated profits. Due to the reduction in electricity tariffs, the sales of the company fell by 1.5% in the first six months of the year 2020. But analysts predict a sunrise for the company. The dividends of the company have increased by 8% annually for five consecutive years. The company is said to be a stable dividend payer since the year 1999.
The company, therefore, makes it to the list of top European stocks for 2021. CFRA gives a buy signal to the stock at a target price of 9.39 dollars
The Top European Stocks for immense growth in 2021 are:
- ASML Holding
- Total SE
- Red Electrica
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