An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank, representing shares of a foreign company. ADRs enable U.S. investors to purchase shares in foreign companies as if they were U.S. stocks, simplifying the process. This makes it easier for Americans to invest internationally and helps foreign companies attract U.S. investors without the complexities of directly listing on U.S. stock exchanges.
Despite the advantages, fewer than 10% of large foreign companies list in the U.S., due to high valuations of some companies which reduce the need for a U.S. listing. Additionally, many foreign firms are often family-owned and resist listing due to concerns about losing control or compromising personal financial benefits.
READ ALSO: 12 Best Stocks to Invest in for the Next 3 Months and Top 8 Stocks To Buy In 8 Different Sectors for the Next 3 Months.
Global Markets React to Trump Era
The recent victory of Donald Trump in the U.S. presidential election is poised to have significant repercussions on global markets, particularly affecting stocks in Europe, the UK, China, and Canada. Analysts from Bloomberg, Yahoo, and CNBC have provided insights into how these regions might respond to Trump’s policies and market dynamics.
European markets are generally expected to suffer under a Trump presidency. Emmanuel Cau, head of European Equity Strategy at Barclays, suggests that Europe may be viewed as a “loser” in this scenario due to Trump’s protectionist trade policies and potential tariffs that could disrupt existing trade relationships. Trump’s historical stance on climate change and environmental regulations could also lead to increased competition for European firms, particularly in energy sectors where U.S. companies may benefit from deregulation. Goldman Sachs analysts have echoed these concerns, forecasting that Trump’s administration could create an unfavorable environment for European stocks, particularly those reliant on exports to the U.S.
For the UK, the implications of a Trump presidency are mixed but lean towards caution. Bloomberg reported that an aggressively competitive U.S. market risks exacerbating existing economic stagnation in Britain. The UK’s reliance on trade with the U.S. makes it particularly vulnerable to shifts in U.S. policy, especially if Trump pursues aggressive tariffs or trade barriers. Additionally, the uncertainty surrounding Brexit negotiations may further complicate the UK’s economic landscape under a Trump administration.
China is likely to face direct challenges from Trump’s trade policies, which may include increased tariffs on Chinese goods. Trump’s statements indicate a willingness to impose significant tariffs on imports from China as part of his broader strategy to address trade imbalances and intellectual property concerns. This approach could lead to volatility in Chinese stock markets as investors react to potential retaliatory measures from Beijing and shifts in global supply chains. The anticipated increase in tariffs could also affect sectors heavily reliant on exports to the U.S., leading to decreased profitability for many Chinese companies.
In contrast to Europe and China, Canadian stocks may experience a long-term boost from Trump’s victory, despite an initial negative reaction post-election. Analysts at Bay Street believe that sectors such as commodities and natural resources could benefit from Trump’s pro-energy policies and potential deregulation efforts despite tariffs. However, there are concerns regarding Trump’s proposed tariffs on Canadian imports, which could disrupt trade relations between the two countries.
As the global market continues to navigate the implications of the Trump presidency, investors are faced with both challenges and opportunities. The potential for increased tariffs, trade barriers, and deregulation efforts has created a complex landscape for foreign companies. Despite the uncertainty, there are still many foreign companies that offer attractive investment opportunities for U.S. investors. With that in context, let’s take a look at the 12 best ADR stocks to invest in according to analysts.
A foreign investor glancing across a cluttered desk, looking out a window at the city skyline.
Our Methodology
For this article, we used the Finviz and Yahoo Finance stock screener to find the 30 largest foreign companies listed in the United States. We then sourced the analysts’ average price targets and picked the 12 stocks that had the highest upside potential, as of November 27. The list is sorted in ascending order of analysts’ average upside potential.
Note: we double checked if these stocks are ADRs using JP Morgan’s ADR website.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best ADR Stocks To Invest In According to Analysts
12. HSBC Holdings plc (NYSE:HSBC)
Upside Potential: 22.92%
HSBC Holdings plc (NYSE:HSBC) is one of the largest banking and financial services institutions in the world, serving around 41 million customers in over 60 countries and territories. The bank operates across four key business segments: Wealth and Personal Banking, Commercial Banking, Global Banking & Markets, and Global Private Banking.
HSBC Holdings plc (NYSE:HSBC) is focusing on digital transformation expanding in high-growth regions such as Asia, and optimizing its global operations to improve cost efficiency and profitability. By streamlining its operations and optimizing its team structure, HSBC Holdings plc (NYSE:HSBC) aims to achieve savings of $300 million.
HSBC Holdings plc (NYSE:HSBC) is actively looking for growth opportunities in the US commercial banking market and is expanding its services in global markets. On November 19, HSBC Holdings plc (NYSE:HSBC) officially launched its Global Private Banking services in the Kuwaiti market, marking a major expansion of its wealth management offerings in the Middle East. This launch solidifies the bank’s position as a leading international bank with an investment advisory license, enabling it to provide bespoke private banking solutions to high-net-worth individuals in Kuwait.
HSBC Holdings plc (NYSE:HSBC) has also decided to subsume its commercial and institutional banking under one division and create a new group for international wealth and premier banking to fuel further expansion. The geographical restructuring, set to take effect on January 1, 2025, will split the business into two divisions, East and West, with Hong Kong and the UK as standalone regions.
11. Shell plc (NYSE:SHEL)
Upside Potential: 24.98%
Shell plc (NYSE:SHEL) is a global energy giant based in London, UK, with operations spanning oil and gas exploration, production, refining, and marketing, as well as renewable energy development. The company’s primary revenue streams come from the sale of crude oil, natural gas, and refined petroleum products. The company is also pivoting toward sustainability, with significant investments in low-carbon technologies, electric vehicle charging networks, and renewable energy projects to adapt to the energy transition and meet rising global energy demand sustainably.
On October 31, Shell plc (NYSE:SHEL) announced results for the July-September period. The company reported adjusted earnings of $6 billion, exceeding analyst projections of $5.3 billion, according to estimates compiled by LSEG. Shell plc’s (NYSE:SHEL) Free cash flow (FCF) rose to $10.83 billion, compared to $7.5 billion in the same quarter last year. Cash capital expenditure declined to $4.95 billion from $5.65 billion in Q3 2023. Additionally, the company announced plans to repurchase $3.5 billion in shares over the next three months while maintaining its dividend at 34 cents per share.
On October 23, Shell Energy North America, a subsidiary of Shell plc (NYSE:SHEL), announced its agreement to acquire a 100% equity stake in RISEC Holdings, LLC. RISEC owns a 609-megawatt (MW) two-unit combined-cycle gas turbine power plant located in Rhode Island, USA. This acquisition strengthens the company’s long-term supply and capacity offtake position in the deregulated Independent System Operator New England (ISO New England) power market.
10. Sony Group Corporation (NYSE:SONY)
Upside Potential: 25.30%
Sony Group Corporation (NYSE:SONY) is a Japanese multinational conglomerate with a diverse portfolio spanning electronics, gaming, entertainment, and financial services. The company’s major revenue drivers include the PlayStation gaming ecosystem, consumer electronics such as cameras and televisions, and content production through its music and film divisions.
Sony Group Corporation (NYSE:SONY) is leveraging its innovation in technology, expanding its gaming and subscription services, and capitalizing on the popularity of its intellectual properties to fuel growth across its core businesses. The company recently acquired KinaTrax, Inc., a motion capture technology company that collects in-game performance without the need for specialized hardware, to create a comprehensive sports data platform. This acquisition is expected to generate synergies and drive growth in the sports data market.
Additionally, on November 19, Sony Group Corporation’s (NYSE:SONY) Sony Semiconductor Solutions Corporation, a leader in image sensors and other semiconductor products, announced the release of a new industrial CMOS image sensor called the IMX925, which features a global shutter and a high pixel count of 24.55 megapixels. This sensor is designed for high-speed processing and is optimized for industrial equipment imaging, such as machine vision cameras.
The IMX925 sensor is part of an expanded product lineup that includes three other models with different sensor sizes and frame rates. The IMX925 and other models in the lineup are expected to be useful in advanced inspection processes such as 3D inspections and will be available for sample shipment in May 2025.
9. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Upside Potential: 25.83%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest dedicated semiconductor foundry. The company manufactures advanced chips for major clients such as Apple, NVIDIA, Qualcomm, and AMD. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) cutting-edge technology, particularly in the production of 3nm and 5nm chips, places it at the forefront of the semiconductor industry. The increasing demand for high-performance computing, artificial intelligence, and 5G technology is driving its growth. Additionally, the company is investing heavily in expanding its production capacity.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is poised to dominate the semiconductor space with its cutting-edge 2nm chip technology. The company already has a dominance in advanced node technologies (3nm, 5nm, and 7nm) which drives its leadership in the AI and high-performance computing (HPC) chip space. This dominance in advanced node technology ensures the company’s near-monopoly on high-demand chips and creates a significant entry barrier for competitors.
Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) upcoming 2nm (N2) chips will introduce the gate-all-around (GAA) transistor structure, which is a significant leap that will drive better power efficiency and performance compared to the current FinFET architecture. This innovation is essential as demand for high-performance chips continues to rise. The N2 node will offer 10% to 15% performance gains at the same power, while also cutting power consumption by 25% to 30% compared to N3E. The shift to N2 will enable a 15% improvement in transistor density, allowing chip designers to pack more computing power into smaller spaces.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is also building several new fabrication plants, which will increase its production capacity and solidify its position as the world’s leading semiconductor foundry. The company’s $11 billion investment in a new semiconductor fabrication plant in Dresden, Germany, represents a significant strategic shift toward regional diversification. This expansion will not only increase the company’s production capacity but also reduce its reliance on any single region, making it more resilient to potential disruptions.
8. ASML Holding N.V. (NASDAQ:ASML)
Upside Potential: 31.15%
ASML Holding N.V. (NASDAQ:ASML) is a Dutch company that designs and manufactures photolithography machines, that are used in semiconductor production companies to create chips. The company is one of the most exclusive suppliers of Extreme Ultraviolet (EUV) lithography machines. ASML Holding N.V. (NASDAQ:ASML) earns revenue through equipment sales and servicing agreements with top semiconductor manufacturers like TSMC, Intel, and Samsung.
The growing demand for smaller and more efficient semiconductor devices is driving the robust growth of the EUV lithography market. These chips are integral to a wide array of modern electronics, including smartphones, computers, and numerous other devices, where high performance and compact design are increasingly vital.
ASML Holding N.V. (NASDAQ:ASML) is well-positioned to capitalize on the growing demand for advanced semiconductors, driven by the increasing adoption of artificial intelligence (AI) and the Internet of Things (IoT). The company’s EUV lithography technology is instrumental in advancing Moore’s Law, enabling continuous miniaturization and performance improvement of semiconductors. According to Khaveen Investments, ASML Holding N.V. (NASDAQ:ASML) has an estimated 83% market share in Extreme ultraviolet (EUV) lithography systems. and its proprietary EUV technology is expected to drive growth in the double-digit range between 2025 and 2030.
7. TotalEnergies SE (NYSE:TTE)
Upside Potential: 31.99%
TotalEnergies SE (NYSE:TTE) is a French multinational energy company engaged in oil and gas exploration, refining, and marketing, as well as renewables and electricity. The company makes money from its integrated energy business, including crude oil production, natural gas, petrochemicals, and renewable energy solutions. With a presence in over 120 countries, TotalEnergies SE (NYSE:TTE) is one of the largest energy companies in the world, serving a diverse range of clients including governments, industries, and individuals.
TotalEnergies SE’s (NYSE:TTE) hydrocarbons segment, which accounts for a significant portion of its revenue, has a robust portfolio of upstream projects that are expected to drive growth in the coming years. The company has set a target to increase its hydrocarbon production by 3% per annum until 2030, driven by six major oil and gas projects that have been sanctioned in 2024, including the GranMorgu project in Suriname, which has estimated recoverable oil reserves of over 750 million barrels.
TotalEnergies SE’s (NYSE:TTE) integrated LNG segment is also expected to contribute to growth, with several medium-term sales contracts signed in Asia, bringing the total Asian LNG contracts signed to 4 million tons for the nine months ended on September 30. In addition to its hydrocarbons segment, TotalEnergies SE (NYSE:TTE) is also investing heavily in renewable energy, with a target to reach 35% of its electricity generation from renewables by 2025. The company has made significant progress in this area, with the startup of two giant solar farms in the US and partnerships with companies such as Adani in India and RWE in Germany and the Netherlands.
6. Sanofi (NASDAQ:SNY)
Upside Potential: 32.08%
Sanofi (NASDAQ:SNY) is a French multinational pharmaceutical company focusing on prescription medicines, vaccines, and consumer healthcare products. The company earns revenue by developing and marketing treatments for chronic diseases, rare conditions, and infectious diseases. Sanofi’s (NASDAQ:SNY) growth is propelled by strong demand for its flagship drugs such as Dupixent (for asthma and eczema) and an expanding vaccine portfolio. The company is also investing heavily in R&D to capture opportunities in immunology and oncology.
In Q3, Sanofi (NASDAQ:SNY) reported strong earnings, beating expectations with the company’s revenue increasing 16% year-over-year to $14.09 billion. The company’s Pharma sales increased 13.0% to $8.80 billion, mainly driven by Dupixent and other newly launched medicines. Dupixent sales increased 23.8% year over year to $3.66 billion in the quarter, driven by its sixth indication approval for chronic obstructive pulmonary disease (COPD) in the United States in September. Sanofi (NASDAQ:SNY) vaccine sales increased 25.5% to $3.99 billion, driven by earlier-than-anticipated deliveries of respiratory syncytial virus (RSV), vaccine Beyfortus and flu vaccines.
Sanofi (NASDAQ:SNY) expects to present several Phase 3 readouts, submissions, and regulatory decisions in the next 18 months. The company’s anti-CD38 molecule, Sarclisa, has also been approved in the US for adult patients with newly diagnosed multiple myeloma who are not eligible for transplantation. and shareholders.
5. AstraZeneca PLC (NASDAQ:AZN)
Upside Potential: 33.26%
AstraZeneca PLC (NASDAQ:AZN) is a leading biopharmaceutical company that is dedicated to developing, manufacturing, and selling prescription medicines for a wide range of medical conditions. The company’s diverse portfolio of treatments is focused on three key therapeutic areas: oncology, cardiovascular, renal, and metabolism (CVRM), and respiratory and immunology.
AstraZeneca PLC’s (NASDAQ:AZN) growth is driven by its strong performance in oncology, where its therapies are experiencing strong demand and driving revenue growth. The company’s CVRM therapeutic division is also performing well. Additionally, the company’s rare disease therapeutic division is expanding, driven by increasing sales of Ultiris and Soliris. The company’s weight management pipeline, including AZD5004 and AZD6234, also shows significant growth potential, especially with strategic hires and advancements in clinical trials.
AstraZeneca PLC (NASDAQ:AZN) has an ambitious long-term goal, aiming to reach $80 billion in revenue by 2030, and plans to launch 20 new medicines by 2030, many with the potential to generate more than $5 billion in peak year revenues. The company is expanding in emerging markets and is confident in its ability to achieve this goal.
4. Toyota Motor Corporation (NYSE:TM)
Upside Potential: 34.44%
Toyota Motor Corporation (NYSE:TM) is one of the world’s largest automotive manufacturers, producing vehicles, including hybrids, electric vehicles (EVs), and traditional internal combustion engine cars. The company also generates income from financing and leasing services. Toyota Motor Corporation’s (NYSE:TM) growth is driven by its leadership in hybrid technology, ongoing investment in EV development, and a strong global presence, especially in emerging markets. The company is also exploring hydrogen fuel cell vehicles and
On November 9, Reuters reported that Toyota Motor Corporation (NYSE:TM) is planning a major overhaul of its operations in China, with a goal of producing at least 2.5 million vehicles per year in the country by 2030. The overhaul of Toyota Motor Corporation’s (NYSE:TM) Chinese operations is also seen as a bid to revamp its product lineup and make it more competitive in the local market.
The company is expected to introduce new models and variants that are specifically designed for Chinese consumers, who are increasingly demanding more advanced safety features, connectivity, and autonomous driving capabilities. Toyota Motor Corporation (NYSE:TM) is also focusing on increasing its investment in electrification and autonomous driving.
3. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Upside Potential: 36.73%
Anheuser-Busch InBev SA/NV (NYSE:BUD) is the world’s largest brewer, known for iconic brands like Budweiser, Stella Artois, and Corona. The company produces and distributes beer, spirits, and non-alcoholic beverages across more than 100 countries. Anheuser-Busch InBev SA/NV’s (NYSE:BUD) growth is fueled by premiumization trends in the beverage industry, the expansion of low- and no-alcohol options, and its focus on emerging markets. The company is also leveraging digital platforms and direct-to-consumer channels to strengthen customer engagement and drive sales.
Anheuser-Busch InBev SA/NV (NYSE:BUD) is actively investing in infrastructure, sustainability, and global brand partnerships. On November 20, the company announced that it would invest $14 million in upgrading its Houston brewery. Further expanding its global footprint, Anheuser-Busch InBev SA/NV (NYSE:BUD) recently extended its partnership with FIFA, becoming the official beer partner for the FIFA Club World Cup 2025. Scheduled to take place in the United States, the FIFA Club World Cup 2025 offers the company a platform to engage with a vast international audience.
The partnership is complemented by its sponsorship of the FIFA World Cup 2026, set to be hosted across 16 cities in Canada, Mexico, and the U.S. These associations enable the company to connect its megabrands, such as Budweiser and Michelob ULTRA, with billions of football fans worldwide.
2. Alibaba Group Holding Limited (NYSE:BABA)
Upside Potential: 38.99%
Alibaba Group Holding Limited (NYSE:BABA) is a leading Chinese e-commerce and technology company that generates revenue through online retail and wholesale platforms, digital media, and logistics. The company is also a significant player in the field of artificial intelligence (AI), with Alibaba Cloud’s Platform for AI, and offers a comprehensive suite of tools and services for enterprises and developers.
Alibaba Cloud’s Platform enables users to efficiently manage tasks such as data labeling, model building, training, and deployment, supporting a wide range of industry applications. According to DBS Bank, Alibaba Cloud services have a 37% market share in China.
On November 18, the Financial Times reported that Alibaba Group Holding Limited (NYSE:BABA) is actively recruiting top AI experts in Silicon Valley, targeting individuals with experience at leading American firms such as OpenAI. The company is recruiting an AI team in California’s San Francisco Bay Area and has approached AI researchers, engineers, and product managers who have worked at some of the biggest tech companies in the United States. By hiring engineers with backgrounds in top US companies, Alibaba Group Holding Limited (NYSE:BABA) is aggressively expanding its presence in the AI space through strategic talent acquisition, despite efforts by the US government to limit the growth of Chinese tech companies.
Alibaba Cloud also benefits from a favorable environment, with the Chinese government promoting its adoption as part of its national digital strategy. The company’s cloud division is poised for significant growth, driven by increasing internet adoption, the rollout of 5G, and government incentives driving cloud demand.
1. Novo Nordisk A/S (NYSE:NVO)
Upside Potential: 39.74%
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company based in Denmark, specializing in diabetes care, obesity treatment, and hormone replacement therapies. The company is known for prescription medications such as insulin, GLP-1 receptor agonists, and obesity management drugs such as Wegovy and Ozempic.
In the first nine months of 2024, Novo Nordisk A/S (NYSE:NVO) achieved 24% sales growth and 22% operating profit growth from the previous year, driven by the rising demand for its GLP-1-based diabetic and obesity medicines. The company’s GLP-1 treatments have expanded to cover three times more patients compared to three years ago, with GLP-1 volume market share increasing to 65% in 3 years.
Novo Nordisk A/S (NYSE:NVO) is also focused on expanding its product offering and growing its market share through innovation. The company’s recent phase 1 clinical trial results for its new experimental obesity drug, Amycretin, have shown promising results, with a 13.1% average weight loss after 12 weeks. This achievement surpasses the efficacy of its existing weight-loss drug, Wegovy, and outperforms other experimental treatments in the market.
According to Artisan Partners, Novo Nordisk A/S (NYSE:NVO) has the best obesity/Type 2 diabetes pipeline in the industry, which bodes well for the company’s future growth prospects. As the company continues to innovate and expand its product offerings, it is likely to attract more patients and healthcare providers, driving revenue growth and solidifying its position as a leader in the diabetes care market.
While we acknowledge the potential of Novo Nordisk A/S (NYSE:NVO) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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