We recently published a list of 10 Top Performing European Stocks Heading into 2025. In this article, we are going to take a look at where Criteo S.A. (NASDAQ:CRTO) stands against other top performing European stocks.
As per Deloitte, inflation in the Eurozone slightly rebounded in October but was still quite low. The consumer price index increased 2% in October as compared to the year earlier. While this was slightly up from the low of 1.7% of inflation in September, this was the lowest since June 2021. For the ECB, the increase to 2% should not be worrisome. This is because the ECB’s target is 2%.
As per the World Economic Forum, European households continue to save at their highest rates in years, with saving rates in the eurozone exceeding the pre-pandemic levels. In Q2 2024, the saving rate in Europe came in at 15.7%, reflecting an increase from the 15.2% rate that was seen in the quarter prior, as per Eurostat (the statistical office of the EU). In its latest economic forecast, the European Commission mentioned that GDP growth in 2024 is expected to be 1% in the European Union. Furthermore, the growth should improve to 1.6% in 2025.
Impact of Trump’s Presidency on Europe’s Economic Growth
As per Goldman Sachs, Europe might face a big hit to economic growth as trade tensions rise. These tensions are fueled by Trump’s proposal for sweeping tariffs on all of the US imports. The large bank added that the actual magnitude of tariff increases might be less of a matter of worry as compared to the uncertainty that is created by threatening to impose tariffs on Europe. While Mr. Trump’s 10% across-the-board tariff poses a clear risk, Goldman Sachs expects the incoming President to initiate a more moderate set of duties on European countries.
These tariffs will be targeted towards auto exports, which are worth $80 billion, or 0.9% of EU exports. The duties are expected to have a significant impact on GDP in Germany, Sweden, and Switzerland in particular. ECB president had earlier mentioned that, if Trump wins, it will be a threat to Europe due to his tariff ideas, NATO commitment, and climate change policies.
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Pathway For Rate Cuts and Inflation
The Bank of England decided to cut the interest rates by 25 basis points and mentioned that expected reductions would be gradual. This is because of the expectations that the British government’s first budget might lead to increased inflation and economic growth. As per Reuters, BoE mentioned that inflation is expected to rise to ~2.5% by the end of 2024 from 1.7% in September and 2.7% by 2025 end before declining gradually below its 2% target in mid-2027.
The Government’s decisions to raise a cap on bus fares, higher value-added tax on private school fees, and increase employers’ social security contributions are some of the measures that might fuel inflation.
Amidst the uncertainties about the Trump Administration’s policies, Wall Street analysts opine that investors are required to bet on stocks that have a proven track record and that are expected to grow in the near future.
A graphic designer in front of a computer rendering a cutting edge digital advertisement for the company.
Our Methodology
To list the 10 Top Performing European Stocks Heading into 2025, we used a screener and sifted through online rankings to extract the European stocks. After getting the initial list of 20-25 stocks, we filtered out the list by selecting the ones that have increased significantly on a YTD basis and which have higher upside potential, as of November 10. Finally, the stocks were ranked in ascending order of their average upside potential.
Why are we interested in the stocks that hedge funds pile into? 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).
Criteo S.A. (NASDAQ:CRTO)
% Increase on a YTD Basis: ~44%
Average Upside Potential: ~43.7%
Criteo S.A. (NASDAQ:CRTO) is a technology company, which offers marketing and monetization services on the open Internet in North and South America, Europe, the Middle East, Africa, and the Asia-Pacific. The company has its headquarters in Paris, France.
Criteo S.A. (NASDAQ:CRTO) remains focused on positioning itself as a leading Commerce Media platform for the Open Web. The company leverages AI-driven tools, unique data, and targeting experience in order to offer advertising solutions. Its focus on becoming a comprehensive Commerce Media platform should differentiate it from the competitive adtech sector. Wall Street analysts believe that Criteo S.A. (NASDAQ:CRTO) can complement major players like Amazon in the retail media space, addressing the fragmentation issue that is being faced by several advertisers when trying to reach consumers throughout multiple platforms.
Criteo S.A. (NASDAQ:CRTO)’s ability to innovate and sustain its market share in the evolving digital advertising space should aid its long-term growth. Furthermore, the company is expected to be supported by its unique dataset and specialized offerings in retail media. As more and more retailers realize the value of monetizing their digital properties, Criteo S.A. (NASDAQ:CRTO)’s solutions might see higher adoption.
The company’s AI-driven tools and technologies and expertise in precision targeting on the open web form a base for strong and sustainable growth.
ClearBridge Investments, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:
“New positions in the quarter were from a variety of sectors. Criteo S.A. (NASDAQ:CRTO), in the communication services sector, provides digital advertising technologies that help drive clients’ e-commerce businesses. While the company was previously reliant on third-party cookies to help optimize its products, management has spent the past five years pivoting away from this technology and focusing on building a leading presence in the burgeoning retail media space. We believe this transformation has reached a tipping point, and that the inherent growth opportunities in this new end market represent a higher growth rate then is currently reflected in the company’s valuation.”
Overall, CRTO ranks 7th on our list of top performing European stocks heading into 2025. While we acknowledge the potential of CRTO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than CRTO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
