Morningstar says these 21 stocks are their top picks in a European market that’s much more appealing than the US, but only offers high upside in select areas

  • The European market is full of top-rated stocks that are looking undervalued right now, according to Morningstar.
  • There are picks across a number of sectors including communications, consumer cyclicals and defensives, healthcare, and utilities.
  • Morningstar gave Just Eat Takeaway a 5-star rating for being the best-positioned food delivery player in the Netherlands, the UK, and Germany.
  • See more stories on Insider’s business page.

Morningstar says stock-pickers have a tough road ahead of them this quarter — and is recommending investors seek opportunities in the Europe, Middle East, and Africa markets, even with the majority of stocks there already fairly valued or overstretched.

Despite only roughly 20% of EMEA equities looking undervalued, it’s still where the best single-stock picks reside, said Morningstar. By the firm’s data, 24% of stocks in the EMEA universe are four- and five-star-rated, implying “material upside potential.” That’s double the share of the North American market.

Within the 10 major EMEA stock sectors, Morningstar says only four are currently undervalued: communication services, financials, and industrials. But the firm’s specific stock picks span eight sectors, and each company has achieved either three-, four- or five-star status in terms of perceived upside.

“In the context of the global picture … EMEA still looks to contain more opportunities than most,” the firm said. “If stock selection was important before, it is absolutely paramount in the current environment.”

Here are the stocks in more detail: 

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