When Wall Street Stumbles: The Most Reliable Stocks to Own During High Inflation and Economic Contraction.
Tariffs, trade wars, rising inflation, and a potential dollar collapse have made investing in today’s markets more complex than ever. Yet, even amid these storm clouds, certain companies could not only remain resilient — they may gain as much as 90%.
Periods of stagflation are notoriously difficult: prices continue to rise while economic growth stalls. This environment strains households and businesses alike — and often leaves markets directionless. We’ve seen this before. In the 1970s, for example, stagflation was severe enough that the Dow Jones delivered essentially flat returns over an entire decade. Investors who chose poorly saw their portfolios steadily eroded by inflation.
However, even in that challenging era, opportunities existed. Some sectors outperformed the broader market. Specifically, healthcare, consumer staples, and select high-margin businesses continued to post strong returns.
Today’s macroeconomic backdrop bears similarities to that period. Inflation remains stubbornly high, economic growth is slowing, and global equity markets are increasingly erratic. In response to the recent exodus from Wall Street, investors are turning their attention toward European equities.
1) Fresenius SE KGaA (XETRA, Germany)
Fresenius is a key European healthcare player specializing in electro-medical products. After a challenging stretch, the company is undergoing a significant restructuring aimed at boosting profitability. It has exited low-margin operations like Vamed and FMC, refocusing on stronger-performing units such as Helios (hospital operations) and Kabi (pharmaceuticals). Fresenius forecasts 7% annual sales growth over the next five years, alongside improved ROE and enhanced cash flow generation.
JP Morgan has reiterated its “overweight” rating, assigning a target price of €56.90, representing a potential upside of 42% from current levels.
Following a sharp correction earlier this month — triggered by new U.S. tariffs — the stock has rebounded to its March highs around €40.80. A breakout above that level could open the door to technical resistance zones at €46, €51, and €53.
2) HEXPOL AB (Stockholm, Sweden)
HEXPOL is a Swedish manufacturer of rubber and plastic compounds with a globally diversified client base. The company has a track record of maintaining stable margins through economic cycles, supported by disciplined management. In fiscal year 2024, it reported revenues of 20 billion SEK, in line with expectations, although earnings per share (EPS) declined 7.3% to 6.45 SEK. Analysts, however, anticipate a recovery in 2025, projecting revenues to rise 3.8% to 21.2 billion SEK and EPS to climb 10% to 7.10 SEK.
Despite being listed in Stockholm, HEXPOL generates a significant portion of revenue from the U.S., which may benefit from a weakening dollar — enhancing competitiveness abroad.
Currently, the stock trades at below-industry-average valuations, but recent strategic acquisitions have improved its outlook. With net margins around 11% and a projected 7% average annual growth rate, the stock appears undervalued. Analysts estimate a fair value that is 32.6% above current levels, with some price targets reaching as high as 115 SEK, suggesting a 36% potential upside.
3) Novo Nordisk (Denmark)
Novo Nordisk remains a global leader in treatments for diabetes and obesity — two rapidly expanding markets. Flagship drugs like Ozempic and Wegovy have propelled the company’s global growth trajectory.
That said, the stock has recently faced significant headwinds, with a correction of over 50% year-over-year — including a steep 30% drop in just the last quarter. This has brought valuations back to more attractive levels: Novo now trades at a 59% discount to its historical average price-to-earnings ratio.
With the next earnings report approaching, some analysts anticipate a technical rebound, particularly since the company’s fundamentals remain strong. Projections indicate a 68% revenue increase over the next five years, along with a consistent operating margin near 40%. These robust metrics are drawing attention from investors seeking stable, high-quality growth plays.
UBS and Stiefel have reaffirmed their bullish outlook, with target prices of 750 DKK and 700 DKK, implying a potential upside between 76% and 90%.
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The information and considerations contained in this article must not be used as the sole or main basis for making investment decisions. The reader maintains full freedom in his investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and is not to be considered an offer or solicitation to the public savings.| Original article published on Money.it Italy 2025-04-28 07:51:00. Original title: 3 azioni anti stagflazione che possono salire fino al 90%
