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Investing.com -- Goldman Sachs updated its European Conviction List on Tuesday, adding ING Groep (AS:INGA), LVMH (EPA:LVMH), and Atlas Copco (ST:ATCOa), while removing BNP Paribas (EPA:BNPP), Rio Tinto (NYSE:RIO), and Volvo (ST:VOLVb), Flughafen (VIE:VIEV) Zurich (SIX:FHZN), and Fresenius Medical (TASE:BLWV) Care (NYSE:FMS).
The bank sees ING as a “key beneficiary” of German fiscal expansion, citing its sizable exposure to German lending and “healthy total capital distribution of €7.1bn over 2025 and €6.2bn over 2026.”
Analyst Chris Hallam expects ING’s return on tangible equity (ROTE) to increase from 13% in 2024 to 15% in 2027, supported by a turnaround in net interest income and asset growth of 3–4% in 2025–26.
Goldman also feels bullish on LVMH, highlighting “favorable risk/reward from current levels and well positioned to outperform in the next luxury upcycle.”
Analyst Louise Singlehurst believes that softness in the luxury giant’s Q2 earnings is already priced in and sees room for upside as Chinese and U.S. luxury demand recover in 2026.
“We believe in the luxury cycle and LVMH as a winner in the next cycle, as it has been in prior ones given its scale,” Goldman analysts wrote.
Atlas Copco was added on expectations for a modest recovery in orders toward late 2025, driven by trends in U.S. reshoring and semiconductors.
Analyst Daniela Costa emphasized its defensive characteristics, including a high aftermarket exposure and strong return on capital, and sees support from a potential special dividend at year-end.
“Atlas Copco has one of the highest ROICs in Daniela’s coverage and its organic sales growth and margin resilience over the last 10 years also screen as among the best, making this a name to own in an uncertain environment,” the note states.
Performance across the Conviction List was mixed in June. EQT AB (ST:EQTAB) rose 10% on improved sentiment around fundraising, while Prosus (OTC:PROSF) gained 5% following its Capital Markets Day.
On the other hand, Zalando SE (ETR:ZALG) dropped nearly 10%, and shares of AstraZeneca (NASDAQ:AZN) and Novo Nordisk (NYSE:NVO) both declined on concerns around pharmaceutical pricing and tariffs.
Goldman’s strategists continue to encourage diversification beyond the U.S., pointing to improved European fundamentals and valuation gaps. “Interest in Europe is picking up,” the report notes, with banks, telecoms, and fiscal policy beneficiaries flagged as attractive.