Barclays has given a bullish forecast for the stock market in 2024, predicting returns will be higher than last year’s extraordinary gains but also more modest. The investment bank believes there is still room for stocks to rise if inflation continues to slow, allowing the central bank to eventually cut interest rates. “If a soft landing does materialize, value, small caps and international/EU stocks will provide catch-up,” Barclays equity strategists led by Emmanuel Cau said in a note to clients on January 18. Potential.” The Wall Street bank named the following five companies on its European “Catalyst Beliefs” list with strong upside potential. Enav Topping the list with the greatest upside potential is Italy-based air traffic control company Enav. Barclays expects shares to rise 59% over the next 12 months to 5.20 euros ($5.70) per share. The bank expects the company’s “business plan update” scheduled to be released sometime in the first quarter of this year to be a catalyst for share price repricing. The investment bank also believes that the current share price represents “an attractive entry point” for Enav stock after a difficult 2023. UCB Barclays believes Belgian biopharmaceutical company UCB can beat 2023 sales expectations with its new psoriasis drug Bimzelx. While the drug has struggled in the U.S. amid warnings about side effects, Barclays sees signs of healthy global demand. UCB will report full-year results on February 28, and according to the bank, this catalyst could help the stock start rising 42% over the next 12 months. ABN Amro is also well-positioned and expected to deliver higher profits and cost savings, according to Barclays. The investment bank expects ABN to lower its capital ratio target when it reports results on February 14, freeing up cash for dividends and buybacks. Vivendi In December, French media group Vivendi announced that it was considering splitting into three independent companies. Barclays estimates Vivendi’s valuation could rise 24% due to a lower holding company discount. The bank said it expects to release more details on March 8 along with 2023 results, which could act as a catalyst. Volkswagen Barclays believes Volkswagen will offer turnaround potential in 2024 after a disastrous 2023 and 2022. The bank believes the automaker’s management is committed to improving profit margins. Barclays also believes that the electric cars launched this year will push Volkswagen to develop more profitable models. “Overall, we see room for earnings upgrade and re-rating potential amid extremely negative investor sentiment,” Barclays analysts said. — CNBC’s Michael Bloom contributed reporting.
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