Euro zone inflation eased in March: three European stocks to buy

on Mar 31, 2023
Updated: Apr 18, 2023
  • Euro zone inflation eased significantly to 6.9% in March.
  • Economist still expects the ECB to continue raising rates.
  • Goldman Sachs reveals three stocks with over 100% upside.

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European stocks ended in the green today after the region’s statistical office said consumer prices eased significantly in March.

Economist Allen-Reynolds reacts to today’s economic data

On Friday, Eurostat confirmed that a meaningful decline in energy prices lowered headline inflation to 6.9% in March.

In comparison, consumer prices were up a whopping 8.5% in February. Still, economist Jack Allen-Reynolds of Capital Economics is not convinced that today’s data will make the European Central Bank not raise rates any further.

Policymakers at the ECB won’t read too much into the drop in headline inflation in March and will be more concerned that the core rate hit a new record high.

It is also noteworthy that food prices remain stubbornly high in the Euro zone. Excluding food, energy, alcohol and tobacco, the so-called core inflation edged up slightly in March from 5.6% to 5.7%.

Goldman Sachs sees over 100% upside in three European stocks

Also on Friday, Goldman Sachs analyst John Sawtell recommended buying Deutsche Bank AG (ETR: DBK) on the recent weakness.

He’s convinced that the multinational remains financially sound and fears of it being the next Credit Suisse are broadly overblown. To that end, Sawtell expects “DBK” to more than double from here over the next twelve months.

Two other names in which he sees over 100% upside and, therefore, recommends buying, include UBS Group AG (NYSE: UBS) and the British telecommunications company BT Group.

The macroeconomic backdrop remains uncertain. That said, we see scope for alpha opportunities with returns dispersion across sectors.


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