Trump’s foreign policy shake-ups are doing what years of sluggish growth couldn’t—lighting a fire under European stocks. The STOXX Europe 600 is up 8% this year, outpacing the S&P 500 by over 10 percentage points. It’s Trump’s tough talk on alliances and tariffs that has jolted Europe into action, unleashing massive Fiscal stimulus, defense spending, and relaxed budget rules. Now, investors are finally treating the region like a serious opportunity.
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Arkema Revs Up as Construction Spending Picks Up
French chemical maker Arkema (FR:AKE) is one of the quieter winners. Hit hard during the industry’s downturn, the stock now looks primed for a rebound as European governments pour money into infrastructure. Portfolio manager Thomas Shrager told Barron’s that Arkema should benefit from construction demand and recent acquisitions, calling the stock “cheap” after a stretch of underperformance.
Porsche Holds Strong Despite Auto Tariff Threats
Even as Trump threatens tariffs on European autos, Shrager still sees value in Porsche (DE:PAH3). “The guy who spends money on a Porsche doesn’t care if it’s $220,000 or $200,000,” he said. Unlike mass-market rivals, Porsche’s luxury buyers are less price sensitive—and its shares, trading at 14.5x earnings, still look reasonable.
BAT’s Dividend Lures Value Hunters
Then there’s British American Tobacco (GB:BATS). While slower than peers in going smoke-free, BAT offers a hefty 7.5% dividend yield and trades at just 8.8x earnings. It seems that U.S. valuations are stretched, and therefore income-focused investors are now turning to Europe—and BAT’s payout makes it hard to ignore.
Investors can compare these stocks side by side using TipRanks’ Stocks Comparison Tool. Among the three, Arkema (AKE) currently holds the most bullish analyst consensus with a Strong Buy rating. The average price target for AKE is €101.71, which implies an upside potential of 39.4%.
