We recently published a list of 10 Top Performing European Stocks Heading into 2025. In this article, we are going to take a look at where Bicycle Therapeutics plc (NASDAQ:BCYC) stands against other top performing European stocks.
As per Deloitte, inflation in the Eurozone slightly rebounded in October but was still quite low. The consumer price index increased 2% in October as compared to the year earlier. While this was slightly up from the low of 1.7% of inflation in September, this was the lowest since June 2021. For the ECB, the increase to 2% should not be worrisome. This is because the ECB’s target is 2%.
As per the World Economic Forum, European households continue to save at their highest rates in years, with saving rates in the eurozone exceeding the pre-pandemic levels. In Q2 2024, the saving rate in Europe came in at 15.7%, reflecting an increase from the 15.2% rate that was seen in the quarter prior, as per Eurostat (the statistical office of the EU). In its latest economic forecast, the European Commission mentioned that GDP growth in 2024 is expected to be 1% in the European Union. Furthermore, the growth should improve to 1.6% in 2025.
Impact of Trump’s Presidency on Europe’s Economic Growth
As per Goldman Sachs, Europe might face a big hit to economic growth as trade tensions rise. These tensions are fueled by Trump’s proposal for sweeping tariffs on all of the US imports. The large bank added that the actual magnitude of tariff increases might be less of a matter of worry as compared to the uncertainty that is created by threatening to impose tariffs on Europe. While Mr. Trump’s 10% across-the-board tariff poses a clear risk, Goldman Sachs expects the incoming President to initiate a more moderate set of duties on European countries.
These tariffs will be targeted towards auto exports, which are worth $80 billion, or 0.9% of EU exports. The duties are expected to have a significant impact on GDP in Germany, Sweden, and Switzerland in particular. ECB president had earlier mentioned that, if Trump wins, it will be a threat to Europe due to his tariff ideas, NATO commitment, and climate change policies.
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Pathway For Rate Cuts and Inflation
The Bank of England decided to cut the interest rates by 25 basis points and mentioned that expected reductions would be gradual. This is because of the expectations that the British government’s first budget might lead to increased inflation and economic growth. As per Reuters, BoE mentioned that inflation is expected to rise to ~2.5% by the end of 2024 from 1.7% in September and 2.7% by 2025 end before declining gradually below its 2% target in mid-2027.
The Government’s decisions to raise a cap on bus fares, higher value-added tax on private school fees, and increase employers’ social security contributions are some of the measures that might fuel inflation.
Amidst the uncertainties about the Trump Administration’s policies, Wall Street analysts opine that investors are required to bet on stocks that have a proven track record and that are expected to grow in the near future.
A medical researcher examining a toxon conjugate under a microscope in a laboratory setting.
Our Methodology
To list the 10 Top Performing European Stocks Heading into 2025, we used a screener and sifted through online rankings to extract the European stocks. After getting the initial list of 20-25 stocks, we filtered out the list by selecting the ones that have increased significantly on a YTD basis and which have higher upside potential, as of November 10. Finally, the stocks were ranked in ascending order of their average upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Bicycle Therapeutics plc (NASDAQ:BCYC)
% increase on a YTD Basis: ~35%
Average Upside Potential: ~40.2%
Headquartered in Cambridge, the United Kingdom, Bicycle Therapeutics plc (NASDAQ:BCYC) is a clinical-stage biopharmaceutical company, that is engaged in developing a class of medicines for diseases that are underserved by existing therapeutics in the US and UK.
Bicycle Therapeutics pic (NASDAQ:BCYC)’s proprietary Bicycle platform technology, which develops novel peptide-based therapeutics, has placed the company as a potential disruptor in the oncology space and beyond. The company focuses on developing a class of medicines called Bicycles, which are chemically synthesized peptides constrained to form two loops. These structures demonstrate high stability and affinity for targets, translating into therapies having favorable efficacy and safety profiles.
Bicycle Therapeutics pic (NASDAQ:BCYC)’s lead candidate, zelenectide pevedotin (formerly BT8009), has been positioned as a potential alternative to existing treatments like Padcev, with a focus on improved safety and efficacy profiles. While the company mainly remains focused on oncology applications, the versatility of its proprietary Bicycle platform demonstrates numerous opportunities for expansion into other therapeutic areas. The platform’s ability to develop highly specific and stable peptide-based therapeutics can be applied to various targets and diseases.
Notably, the potential areas for expansion can consist of autoimmune disorders, rare diseases, or even certain neurological conditions where targeted therapies are required. The “plug-and-play” capability of the Bicycle platform results in rapid adaptation to new targets and disease areas. Wall Street analysts opine that Bicycle Therapeutics plc (NASDAQ:BCYC)’s expansion beyond oncology will diversify its pipeline and risk profile and can significantly increase its addressable market and long-term growth potential.
Analysts at Royal Bank of Canada initiated coverage on the shares of Bicycle Therapeutics plc (NASDAQ:BCYC) on 5th September. They gave an “Outperform” rating with a price target of $35.00.
Overall, BCYC ranks 8th on our list of top performing European stocks heading into 2025. While we acknowledge the potential of BCYC as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than BCYC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.