We recently published a list of 12 Best ADR Stocks To Invest In According to Analysts. In this article, we are going to take a look at where TotalEnergies SE (NYSE:TTE) stands against the other best ADR stocks to invest in.
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.
An industrial oil and gas plant, with stacks of pipes issuing steam into the sky.
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.
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).
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.
Overall, TTE ranks 7th on our list of best ADR stocks to invest in according to analysts. While we acknowledge the potential of TTE 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 TTE 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.
