Barclays has recently shared an optimistic outlook for stocks in 2024, projecting higher yet moderate returns compared to the remarkable gains witnessed in the previous year. The investment bank’s equity strategists, led by Emmanuel Cau, expressed their belief that stocks still possess potential for growth, particularly if inflation continues to decelerate, subsequently allowing central banks to potentially reduce interest rates. They also highlighted specific sectors such as value, small caps, and international/EU equities, which they believe offer substantial catch-up potential in the event of a soft landing scenario.
Enav: European Air Traffic Controller with Promise
Enav, an Italian-based air traffic control company, secured the top spot on Barclays’ list, with the investment bank expecting a 59% surge in its shares to reach 5.20 euros ($5.70) per share over the upcoming 12 months. Barclays anticipates that the company’s forthcoming “business plan update” in the first quarter of the year will serve as a catalyst for the shares to reappraise. Furthermore, Barclays views the current share price as an attractive entry point, especially following a challenging 2023.
UCB: Biopharmaceutical Potential
Belgian biopharmaceutical company UCB caught the attention of Barclays due to its potential to surpass sales projections for 2023, primarily driven by its new psoriasis drug Bimzelx. Despite facing challenges in the U.S. related to side effect warnings, Barclays identifies resilient global demand for the drug. UCB is set to disclose its full-year results on Feb. 28, which Barclays considers a catalyst that could initiate a 42% climb in the stock over the next 12 months.
ABN Amro: Dutch Bank Positioned for Progress
Barclays holds a favorable view of Dutch bank ABN Amro, projecting stronger profits and cost savings for the institution. The investment bank foresees ABN Amro lowering its capital ratio target in its upcoming results announcement on Feb. 14, potentially freeing up funds for dividends and share buybacks.
Vivendi: Potential from Strategic Restructuring
French media conglomerate Vivendi’s announcement of considering a split into three separate entities in December has caught the eye of Barclays, who estimates a 24% increase in the company’s valuation owing to reduced holding company discounts. Further details regarding this strategic restructuring are expected alongside the 2023 results announcement on March 8, marking a crucial potential catalyst.
Volkswagen: Revival in the High-Stakes Auto Industry
Barclays is optimistic about the revival potential of Volkswagen in 2024 following challenging periods in 2023 and 2022. The investment bank acknowledges the commitment of the carmaker’s management to improving margins and also predicts a shift towards higher-profit models with the introduction of electric vehicles in the current year. Overall, Barclays identifies room for earnings
upgrades and re-rating potential amid extremely negative investor sentiment.
In conclusion, Barclays’ carefully curated list of European “Conviction with Catalysts” highlights promising stock ideas that encompass various sectors, including air traffic control, biopharmaceuticals, banking, media, and automotive industries. The bank’s projections are based on comprehensive analyses and forecasts, aiming to guide investors in making informed decisions as they navigate the dynamic landscape of stock investments.