11 Best Italian Stocks To Invest In 2024

Published on April 6, 2024 at 8:37 pm by Ramish Cheema in Hedge Funds, News

In this piece, we will take a look at the 11 best Italian stocks to invest in 2024. If you want to skip our overview of the Italian economy and all the latest news, then you can take a look at the 5 Best Italian Stocks To Invest In 2024.

The global economy, and particularly the European economy, has been in a state of constant flux since the outbreak of the coronavirus pandemic in 2019. The pandemic forced global manufacturing, travel, tourism, and hospitality industries to come to a halt, making the future uncertain for powerhouses such as Germany. For Europe though, it proved to be just one catastrophe in a set of others, as while the world was sputtering to an economic recovery at the tail end of 2021 and the start of 2022, the Russian invasion of Ukraine kicked off and shook up the European energy market that had come to rely on cheap Russian gas.

The combined implications of these two global events have in fact reworked the makeup of the European economy. Germany is long known to be Europe’s economic powerhouse due to its sizeable companies such as Bayerische Motoren Werke Aktiengesellschaft (OTC:BMWYY) and Volkswagen AG (OTC:VWAGY). However, the German economy hasn’t recovered from the impacts of the pandemic, and this is where the Italian economy comes into play.

To understand the reworked dynamics of the European economic landscape, consider the GDP growth data for the fourth quarter of 2023. During Q4, the Italian economy grew at 0.5%, while the German economy shrank by 0.2%. Officially, this means that Italy is now Europe’s economic powerhouse, and the populist government of the new prime minister Georgia Meloni will undoubtedly be pleased by the fact that in Q1 2024, Italian GDP growth stood at 0.6% while the German economy again shrank, this time at a faster rate of 0.3%.

For Italian stocks, this might mean that they could see revised valuations that could help with the share prices particularly since the inflation reading of 1.3% for March 2024 was lower than the forecast estimates of 1.4%. This means that when compared to their counterparts in other countries, such as the U.S., Italian businesses could benefit from early interest rate cuts that end up benefiting their ability to do business.

So, which Italian stocks could benefit if the land of fashion’s economy continues to improve? Well, for some such stocks, you can take a look at our coverage of 21 Largest Italian Companies by Market Cap. Within this list, the five most valuable Italian companies in terms of market capitalization were Enel SpA (OTC:ENLAY), Eni S.p.A. (NYSE:E), Intesa Sanpaolo S.p.A. (OTC:ISNPY), Ferrari N.V. (NYSE:RACE), and UniCredit S.p.A. (OTC:UNCRY).

We can also look at the recent share price performance of these Italian stocks to see how they’ve fared in an era that has seen Italy overtake Germany as Europe’s premier economy. Well, the five companies’ share price performance has been -15%, -3.96%, 25%, 24%, and 42%, respectively. As you can see, our brief sample of Italian stocks shows that on average, they have been in the green instead of being in the red.

Another Italian stock that has done well this year is the Piombino, Dese based healthcare products provider Stevanato Group S.p.A. (NYSE:STVN). Its shares are up by 13%, and the firm was also a feature of several hedge fund investor letters during Q4 2023.

One such letter came from Baron Funds, and it outlined:

Stevanato sells primary glass containers for injectable drugs, including vials, syringes, and pen cartridges. The industry Stevanto caters to is benefiting from the growth of injectable medicines, an aging population, and increasing global access to medicines. Customers are also increasingly adopting higher-value solutions with tighter manufacturing specifications, specialized coatings, and/or which are sterilized and ready to fill. Collectively, this is driving double-digit revenue growth. After the company reported third quarter 2023 earnings, some investors were concerned that the order book continued to contract, which led to concerns about revenues for 2024 and beyond. We think these concerns are unfounded. Order lead times grew substantially during COVID and the resulting supply-chain constraints, and the order book contraction is a result of normalizing order patterns. The backlog is still elevated, and we expect the contraction to continue. Management has other lines of sight into customer demand, which appears as strong as ever, and we think Stevanato will grow revenues in the double digits for a number of years.

Our strategy is to identify competitively advantaged growth companies that we can own for years. Similar to the other Baron Funds, we remain focused on finding businesses that we believe have secular growth opportunities, durable competitive advantages, and strong management teams. We conduct independent research and take a long-term perspective. We are particularly focused on businesses that solve problems in health care, whether by reducing costs, enhancing efficiency, and/or improving patient outcomes.

So, which Italian stocks one might see do well in the future? We took a look, and some notable names are Enel SpA (BIT:ENEL.MI), Nexi S.p.A. (BIT:NEXI.MI), and Infrastrutture Wireless Italiane S.p.A. (BIT:INW.MI).

Pixabay/Public Domain

Our Methodology

To make our list of the best Italian stocks, we ranked the forty most valuable Italian stocks that trade on both U.S. and other exchanges by their average analyst share price target percentage upside and picked out the top firms.

For some of these best Italian stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.