UBS names the stocks that will drag the European indexes down 10% this year

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The Swiss investment bank also screened for more defensive, less volatile stocks that are likely to be safe from big falls.

UBS has identified stocks at risk of dragging one of Europe's largest equities indexes lower by 10% by the end of this year. The investment bank said its 410 price target for the Stoxx Europe 600 index is based on forecasts for lower earnings and valuations. "Our index target for 2023 was set in our Outlook in January and we see no reason to change it," UBS equity strategists, led by Gerry Fowler, wrote in a note to clients on Aug. 18.

For the overall index to drop 10%, some of the largest companies will need to fall, according to the investment bank. UBS screened for stocks with high volatility, negative earnings revisions already underway, and valuation multiples not yet in the single digits. The above table includes top performers in 2023 so far that may be both overcrowded and expensive, like luxury and semiconductor stocks, according to UBS. Stocks include ASML Holding , LVMH , Siemens , Airbus , and Richemont .

 

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