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 Oculis Holding AG (NASDAQ:OCS) 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 healthcare worker administering a topical treatment for ophthalmic diseases.
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).
Oculis Holding AG (NASDAQ:OCS)
% Increase on a YTD Basis: ~47.33%
Average Upside Potential: ~78.1%
Oculis Holding AG (NASDAQ:OCS) is a clinical-stage biopharmaceutical company, which is engaged in developing drug candidates to treat ophthalmic diseases. The company is based in Zug, Switzerland.
Oculis Holding AG (NASDAQ:OCS) remains focused on the development of innovative treatments to improve eye care and save sight. This is expected to be aided by a differentiated pipeline of product candidates that are targeted at addressing unmet medical needs in ophthalmology. Wall Street analysts believe that Oculis Holding AG (NASDAQ:OCS) has strengthened its leadership team given the recent appointments of Sharon Klier, M.D. as Chief Development Officer and Daniel S. Char as Chief Legal Officer.
These developments, together with a robust balance sheet, place the company well to drive execution in pipeline development and create value for key stakeholders. As of September 30, 2024, Oculis Holding AG (NASDAQ:OCS) had total cash, cash equivalents, and short-term investments of CHF 105.5 million ($125.0 million) and these balances should finance its operations into H2 2026. Moving forward, the company continues to prepare itself for a New Drug Application (NDA) submission for OCS-01 in early 2025.
Oculis Holding AG (NASDAQ:OCS) is optimistic about ramping up the late-stage pipeline and transitioning to the commercial phase. This optimism stems from an experienced leadership team and strategic planning targeted at improving patient outcomes in the ophthalmology sector. It plans to consult with the FDA in Q1 2025 to discuss the positive topline results from the Phase 2b RELIEF trial, together with the next steps for OCS-02 (licaminlimab) development.
As per Wall Street analysts, the shares of Oculis Holding AG (NASDAQ:OCS) have an average price target of $29.67.
Overall, OCS ranks 2nd on our list of top performing European stocks heading into 2025. While we acknowledge the potential of OCS 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 OCS 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.
