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 Opera Limited (NASDAQ:OPRA) 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.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
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.
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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).
Opera Limited (NASDAQ:OPRA)
% Increase on a YTD Basis: ~41.9%
Average Upside Potential: ~27.4%
Opera Limited (NASDAQ:OPRA) offers mobile and PC web browsers and related products and services in Norway and internationally. The company is headquartered in Oslo, Norway.
Wall Street analysts are optimistic about Opera Limited (NASDAQ:OPRA)’s e-commerce segment and GX platform. The company’s strategic focus on monetization improvements and its emphasis on high-value markets and GX users should contribute to sustained topline and bottom-line growth in the near to medium term. Furthermore, its focus on AI is another advantage that should enhance user experience and engagement.
Opera Limited (NASDAQ:OPRA) made its integrated AI, Aria, which remains accessible to all users without the need for logging in. It forms part of the company’s broader strategy to enhance its browser AI capabilities. The company’s ongoing focus on innovation and aggressive approach to capturing market share should fuel its performance. Opera Limited (NASDAQ:OPRA) remains optimistic about Q4 2024, particularly about e-commerce growth during the holiday season.
During Q3 2024, the strong monetization performance of its browsers and growth of its Opera Ads platform, together with Opera Limited (NASDAQ:OPRA)’s ability to deliver targeted, high purchase intent traffic to its advertising partners, led to the advertising revenue growth of 26% YoY to $76.8 million.
The company’s search revenue saw an increase of 13% YoY as a result of the focus on users with the potential for the greatest monetization. For FY 2024, Opera Limited (NASDAQ:OPRA) expects revenue in the range of $470 million – $473 million and adjusted EBITDA of between $112 million – $114 million. TD Cowen increased the target price on the shares of the company from $25.00 to $28.00, giving a “Buy” rating on 30th October.
Overall, OPRA ranks 10th on our list of top performing European stocks heading into 2025. While we acknowledge the potential of OPRA 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 OPRA 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.
