Global markets may be feeling the effects of volatility and macroeconomic uncertainties, but Barclays believes several large-cap stocks in Europe are good investment opportunities right now. In an Aug. 9 research note titled “Big, Liquid and Popular,” the investment bank’s analysts wrote that “not all recession indicators are flashing red.” “Summer markets are notoriously difficult to navigate, and the recent wave of volatility could have an impact for days or weeks to come, as de-gross losses may not be over yet. Price action could therefore remain unpredictable, while the U.S. election is likely to keep markets on edge well into the fall,” the analysts said. De-gross losses occur when financial institutions such as hedge funds close both their long and short positions. Barclays’ position comes as Europe’s Stoxx 600 is down month-to-date but up year-to-date. The benchmark is up 8.1% year-to-date. Sectors Barclays is overweight in include financials, utilities, real estate and cyclicals — with a preference for technology, retail, aerospace/defense and chemicals. Here are three stocks that are currently less in focus that Barclays is betting on: DSV Barclays is bullish on Danish transportation and logistics company DSV as it says the company appears poised for a strong second half of 2024. Analyst Marco Limite sees “positive tailwinds for profitability across all (DSV) businesses” and expects cost savings to boost profitability by around 180 million Danish kroner ($26.4 million). “We believe DSV’s organic strategy of gross profit growth and above-market volume growth is still not well received,” he said, adding that around 40% of DSV’s gross profit comes from its top 200 customers. DSV’s shares are listed on Nasdaq Copenhagen and trade in the U.S. as an American Depository Receipt (ADR). Shares have risen around 6.8% since the start of the year. Barclays has set a price target of 1,510 Danish kroner on the stock, implying an upside of around 20%. NatWest Group Barclays calls British bank NatWest one of its “preferred names” among European banks. This is thanks to its “industry-leading EPS (earnings per share) momentum and continued earnings growth potential driven by a world-class structural hedge tailwind,” according to analysts Aman Rakkar and Grace Dargan. These factors, they added, more than offset falling interest rates and come with an expected structural re-rating driven by an impending exit of the British government, the removal of British political risks and the improving UK macro outlook. NatWest’s shares are listed on the London Stock Exchange and trade as an ADR in the US. Shares have risen around 58% since the start of the year. Barclays has a price target of 460 pence ($5.9) on the stock, implying an upside of around 36%. Renault Group Also on Barclays’ list is French carmaker Renault, although its “shares are down -16% at the time of note compared to SXAP’s performance of -10%.” Analysts Henning Cosman and Arya Ghassemieh continue to see “strong company-specific factors and near-term earnings stability (absolute and versus consensus) as key positives for (Renault’s) stock story.” “We have consistently liked the respected management team, its strong track record of recent execution and its significantly improved product portfolio, which is already translating into a robust volume-price mix and should enable a continuation of the strong mix into 2024E/25E,” they added. Renault’s shares trade on the Paris-based Euronext exchange and in the U.S. as an ADR. The company’s shares have risen over 12% year-to-date. Barclays has set a price target of 60 euros ($65.80) on the stock, implying upside of nearly 50%. — CNBC’s Michael Bloom contributed to this report.
