Europe is considered to be the most advanced region in the world, especially in terms of standard of living, and you will find European nations dominating the list of countries with the highest standard of living in 2023. This is because of the fact that European laws focus more on consumer rights as opposed to corporations, unlike the U.S., where capitalism ensures that corporations can grow unfettered. This is why the most valuable company in the world, Apple, is worth more than 5 times the most valuable European company heading into 2024. This also increases the potential of such stocks being undervalued, and you can learn more by visiting the most undervalued European stocks to buy now.
Despite these successes and advancements, Europe was particularly hit hard by the economic slowdown in 2022, and a recession was widely expected in 2023, However, according to the International Monetary Fund, while inflation is expected to remain moderate in Europe, modest growth is expected in the region in 2023 and a growth rate of 1.3% is expected, though it's still much lower than the 2022 growth rate of 2.7%. Higher growth rates are expected from Emerging European Economies which will see their growth climb from 1% in 2023 to 3% in 2024, and are extremely important contributors to European growth as the traditional powerhouses and economic giants will continue to see much lower, stable growth rates.
A close-up image of a stock market graph displaying the growth of the company's mutual funds.
Tightening monetary policy to curb inflation has ensured that headline inflation has declined, and tightening policies seem to have peaked in several European countries. On the other hand, energy-intensive countries such as Germany and Hungary are struggling more especially due to the energy crisis resulting from the Russia-Ukraine war. Unfortunately, the war is nowhere close to an end and in fact, many of the most valuable European companies heading into 2024 ended operations in Russia at a great cost, after pressure from investors and most European countries sanctioning Russia, impacting the market cap of the most valuable European countries heading into 2024.
In today's age of tech growth, advancements in this area are intrinsic to economic prosperity, and the most technologically advanced countries in Europe are playing their part in this respect. The value of the tech industry in Europe is already worth over $3 trillion and many of the most valuable European countries heading into 2024 are based in the tech industry. Tech growth in Europe has far surpassed overall economic growth in the region, and European VC returns have equaled U.S. returns both on short-term and long-term horizons, making Europe an attractive destination for investors. This is also why some of the top performing European stocks are tech stocks. A challenge in this respect is that funding has slowed down in 2023 as compared to 2022, falling by 21% to $8.2 billion. Europe's competitiveness in this field has seen its share of global tech funding climb up to 29%, still behind the U.S. but catching up quickly.
Because of higher disposable income, top tech companies in the world have established major operations in Europe. At the same time, because of Europe's stringent laws, many of the most profitable tech companies in the world are a bit concerned about the future of operations in the region. Meta Platforms, Inc. (NASDAQ:META), called this out in its Q2 2023 earnings call " With respect to EU-US data transfers, we saw a positive development with the European Commission’s adoption of a final adequacy decision, which allows us to continue to provide our services in Europe. This is good news. Though broadly speaking, we continue to see increasing legal and regulatory headwinds in the EU and the US that could significantly impact our business and our financial results." Additional laws by Europe which don't allow social media companies to provide personally targeted advertisements have led to Meta Platforms, Inc. (NASDAQ:META) considering a monthly charge on users in the European Union. Despite these challenges, Meta Platforms, Inc. (NASDAQ:META) has seen its share price increase by over 140% YTD.
Methodology
To determine the most valuable European companies heading into 2024, we ranked them based on their latest market cap. While some companies are listed in the U.S., most are unsurprisingly listed in European stock exchanges. For these companies, we've converted their currencies to the U.S. dollar for a uniform comparison. The companies are ranked from highest market cap to lowest. In total, the top 20 most valuable European companies are worth more than $3.5 trillion combined, though even the most valuable company doesn't exceed $0.5 trillion in market cap. For comparison's sake, there are five American companies worth over $1 trillion and 2 worth more than $2 trillion.
Market value as at 31st October 2023 (in $ billions): 68.5
Iberdrola is a Spanish utility company which is a global leader in renewables energy.
Market value as at 31st October 2023 (in $ billions): 69.6
One of the biggest banks in Europe, BNP Paribas has seen its share price stay at roughly the same level as it was at the start of 2023.
Market value as at 31st October 2023 (in $ billions): 80.06
Porsche is one of the most well-known car brands in the world and among the most valuable car companies out there too.
Market value as at 31st October 2023 (in $ billions): 81.1
EssilorLuxottica is the biggest eyewear company in the world, and especially dominates the sunglasses market, owning some of the biggest brands including Rayban and Oakley, and accounts for nearly 70% of the industry's total revenue.
Market value as at 31st October 2023 (in $ billions): 83.0
Eaton Corporation plc (NYSE:ETN) is one of several companies in our list of the most valuable European countries heading into 2024 which is actually an American company but headquartered in Europe in a bid to take advantage of lax tax laws. In 2023, Eaton Corporation plc (NYSE:ETN) saw its share price increase by more than 30%.
ClearBridge Sustainability Leaders Strategy made the following comment about Eaton Corporation plc (NYSE:ETN) in its Q2 2023 investor letter:
“Meanwhile, our cyclical industrials and materials holdings were standouts from a relative perspective. Industrials holdings continued to outperform, with Eaton Corporation plc (NYSE:ETN) advancing amid enthusiasm for the company’s electrical product lineup, which is critical to both energy saving and long-term electrification of the global economy. Solid execution is also helping the stock perform strongly.”
Market value as at 31st October 2023 (in $ billions): 89.3
Air Liquide is one of several French companies among the most valuable companies in Europe heading into 2024 and is a global leader in gases, with a presence in 73 countries.
Market value as at 31st October 2023 (in $ billions): 93.8
Allianz is a major financial services company headquartered in Germany, and among the largest insurance companies in the world.
Market value as at 31st October 2023 (in $ billions): 93.9
Medtronic plc (NYSE:MDT) is a medical devices company, which is headquartered in Ireland but more or less an American company. Medtronic plc (NYSE:MDT) saw its stock price decline by nearly 10% YTD 2023 because of a low ROE and lack of growth. Despite these setbacks, Medtronic plc (NYSE:MDT) is still easily among the most valuable European companies in the world heading into 2024.
Market value as at 31st October 2023 (in $ billions): 94.5
Schneider Electric is a French energy giant and is currently considering investing around 30 million euros in Egypt till 2025.
Market value as at 31st October 2023 (in $ billions): 104.7
Siemens is a major tech conglomerate, and implements automation and digitalization in manufacturing industries. Its subsidiary Siemens Energy saw some of its share price being recovered after guarantee talks amid requests of a government bailout continued. While some of its subsidiaries have struggled, Siemens is still one of the most valuable European companies heading into 2024.
Market value as at 31st October 2023 (in $ billions): 105.4
Airbus is among the biggest European defense companies and recently easyJet, a UK based company, announced that it would purchase 257 Airbus jets as it aims to futureproof its fleet.
Market value as at 31st October 2023 (in $ billions): 106.8
Among the most valuable clothing companies in the world, Inditex owns some of the top brands in fashion including Zara, and owns more than 7,000 stores in nearly 100 countries. Recently, Inditex agreed to purchase recycled polyester from a U.S. startup while also partnering with Maersk in a bid to reduce transport emissions and become more environmentally friendly.
Market value as at 31st October 2023 (in $ billions): 107.7
Deutsche Telekom is among the most valuable telecom companies in the world, and has received strong institutional backing with nearly half of its shares being owned by them.
Market value as at 31st October 2023 (in $ billions): 112.8
The largest beer company in the world by a mile, Anheuser-Busch InBev SA/NV (NYSE:BUD) has struggled somewhat after a major boycott of its Bud Light brand, but in Q3 2023, Anheuser-Busch InBev SA/NV (NYSE:BUD) delivered growth in revenue and also reaffirmed guidance which has seen its share price increase by over 6% in the past one month.
Market value as at 31st October 2023 (in $ billions): 133.9
Luxury product companies are among the top European companies right now, and Christian Dior is no exception, though a tough 2023 has seen it lose around 5% in market value.
Market value as at 31st October 2023 (in $ billions): 140.4
Sanofi (NYSE:SNY) is one of the most profitable pharmaceutical companies in the world, and recently invested $30 million in MeiraGTx's gene therapy pipeline. However, after it dropped its profit target for 2025, Sanofi (NYSE:SNY) ended up losing around $21 billion in its market cap, resulting in a fall in its ranking among the most valuable companies in Europe heading into 2024.
Market value as at 31st October 2023 (in $ billions): 153.4
Prosus is considered to be among the biggest tech investors in the world and the Dutch giant recently saw its CEO step down and M&A head take over as the new CEO.
Market value as at 31st October 2023 (in $ billions): 156.8
SAP SE (NYSE:SAP) is one of the biggest software companies in the world, and its Qualtrics divestiture and strong performance has seen its share price increase by over 30% YTD 2023.
Ave Maria made the following comment about SAP SE (NYSE:SAP) in its Q1 2023 investor letter:
“SAP SE (NYSE:SAP) provides enterprise application software products worldwide. SAP is successfully transitioning from a perpetual license model to a SAAS model, which we believe will lead to an increase in TAM (total addressable market), higher margins, and lower capital intensity.”
Market value as at 31st October 2023 (in $ billions): 159.0
One of the largest oil companies in the world, TotalEnergies SE (NYSE:TTE) has seen its share price increase by over 5% YTD 2023.
Aristotle Capital Global Equity Strategy made the following comment about TotalEnergies SE (NYSE:TTE) in its Q3 2023 investor letter:
“TotalEnergies SE (NYSE:TTE), one of the world’s largest energy companies, was also a primary contributor for the quarter. The company continues to execute on its strategic plan to reach net‐zero emissions by 2050 which, in contrast to many European energy providers, it looks to achieve through expanding ownership of renewable power and low‐carbon assets rather than purely divestment. The company expects to more than double its gross renewable generation capacity by 2025 (primarily in solar) and invest over 30% of its total spending in low‐carbon businesses through 2030. As such, we believe TotalEnergies is uniquely positioned to benefit from the increase in global demand for clean energy. In recent years, TotalEnergies’ reduction in capex and operating expenses has improved its FREE cash flow generation, now further aided by the favorable energy environment. This has supported its continued ability to return cash to shareholders, one of our catalysts, as demonstrated by the $3.8 billion returned through share buybacks and dividends during the second quarter.”
Market value as at 31st October 2023 (in $ billions): 186.6
Accenture plc (NYSE:ACN) is headquartered in Ireland to take advantage of tax laws, and you can learn more about this by visiting the biggest Irish companies. Accenture plc's (NYSE:ACN) strong performance has seen it cements its place among the most valuable companies in Europe heading into 204.
ClearBridge Investments mentioned Accenture plc (NYSE:ACN) in its Q2 2023 investor letter. Here is what the firm has to say:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology
Click to continue reading and see the 5 Most Valuable European Companies heading into 2024.
Suggested Articles:
Disclosure: None. 25 most valuable European companies heading into 2024 is originally published at Insider Monkey.
