There is a silver lining at the end of the tunnel for the European economy. If things fall in place, a revival of sorts is in the cards. The Central Bank of Europe is planning to buy back 60 billion Euros worth of European bonds in a bid to develop the economy. This reminds us of the scenario in the US, during the 2008 recession. The US Government had bailed out the economy back then by providing considerable financial support. Taking a cue out of the US, the European Central Bank too, is trying its best to bring back the economy to safer pastures at least, if not greener. The US stock market showed close to 150%growth after the support from the Government. It is expected that the European stock market will also develop at a rapid pace after this move. This brings us back to the big question, who will be the top gainers when and if the European market bounces back? Please read through to know more:
Ryanair Holdings
The US economic revival has proved that the airline industry was one of the top gainers post the recession period. Hence one of the top beneficiaries of the European economic turnarounds would be Ryanair Holdings (RYAAY, Financial). This is one of the market leaders in the European airline industry and has had a reasonable 2014 when compared to 2013, with close to 9%, 26% and 36% increase in sales, operating margins and EPS growth respectively. Currently it operates a whopping 300 Boeing (BA, Financial) aircrafts and is connected with 186 airports all over Europe. The following are the charts showing the trend of share price for the last year and the EPS trend for the last few years.
EPS
ICON Plc
Icon Plc. (ICLR, Financial) is a company that is into clinical research and development and innovation of new technologies in the biotechnology department. It is widely anticipated that the revival of the European economy will have an extremely positive impact on ICON Plc. as well. This development will encourage lots of investment in the research and development of biotechnology, medical research, clinical equipments and the like. For the last quarter of 2014, ICON Plc. recorded 14.1% increase in growth. It is expected that the company will grow phenomenally in 2015 as well. The share price trend of ICON Plc. is shown below. The prices picked up during the last few months of 2014. The EPS chart also shows an increasing trend for the last few years.
EPS
Luxottica Group
The Luxottica Group (LUX, Financial) that sells luxury brand of eyewear is set to be one of the biggest gainers if the European stock market revives during 2015. Luxottica has a huge presence in the markets outside the US; hence the news about European economy bouncing back is a pleasant shock for the shareholders. The group has an impressive wholesale and retail chain of stores, which will report huge sales during 2015. There are high hopes that the sales figures will reach close to $10.10billion and that the earnings per share would go up to $2.02per share. These are only the minimum expectations and the values are expected to go even higher if the economy has a faster and better turnaround. The chart below shows how Luxottica overcame a mid -year slump to report consistent increases in share prices towards the latter half of 2014.
The EPS, as seen below, saw a few lows due to recession in the European economy; however, it is on the right path of resurrection and is sure to exceed expectations if the economic conditions are favourable.
Conclusion
The year 2015 will redefine the way the European stock market has been performing as lots of changes are expected in the economy. With the European Central Bank pitching in, to contribute towards revival of the economy, shareholders of the above companies can heave a sigh of relief as these stocks will go to great heights, yielding a very good return on their investments, if a revival takes place. Though all efforts are being pooled in the direction to make the European economy healthy, the word “if” does play an important role. If a turnaround happens, which most certainly will, these companies stand to gain a lot.
