Investing.com -- Healthcare and consumer staples sectors in Europe are particularly attractive according to analysts at BofA Securities in a note dated Monday. The analyst cited upside potential over the broader market consensus.
These two sectors stand out for their projected growth and resilience over the coming year, aligning with expectations of an 18% aggregate upside for European stocks under BofA’s coverage, slightly above the consensus estimate of 15%.
In healthcare, BofA’s analysts foresee a 33% upside potential, markedly higher than the consensus projection of 22%.
This optimism reflects expectations for strong earnings growth in the sector, driven by robust demand for pharmaceuticals and medical services, as well as innovations in healthcare technologies.
The sector’s projected earnings per share growth of 8.2% in 2025 underscores its fundamental strength and the confidence analysts have in its performance relative to market peers.
Consumer staples, the second standout sector, is also viewed favorably by BofA analysts. They estimate a 25% upside for the sector, compared to an 18% consensus view.
This optimism is rooted in the sector’s defensive characteristics and its capacity to deliver steady growth despite broader market volatility.
Staples companies benefit from consistent consumer demand for essential goods, positioning them as reliable performers during uncertain economic conditions.
By contrast, sectors such as energy and utilities are viewed less favorably by BofA analysts compared to consensus expectations.
Energy, for instance, is projected to see a 17% upside, falling short of the consensus estimate of 21%. This reflects a more cautious outlook for the sector's growth potential amid shifting dynamics in global energy markets and regulatory pressures.
The healthcare and consumer staples sectors’ strong positioning highlights their appeal as investment opportunities in the European market, especially as investors seek areas of stability and growth amid varying market conditions.
BofA underlines the importance of a sector-focused approach to navigating Europe’s evolving equity landscape.