European uncertainty has lowered the price tag for quality stocks

Fourth-quarter volatility expanded the opportunity set for those looking for a deal

Time to read: 3 min

The fourth quarter of 2018 was tough on investors in European equities, and uncertainty appears to be rising as we enter 2019. But, the Invesco International and Global Growth team believes that environments like these can result in great prices for attractive businesses. In fact, we haven’t seen valuations in Europe this low since 2013. So, what is our outlook for Europe, and where are we finding opportunity?

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As markets refocus on fundamentals, EQV takes the spotlight

Could we see an increased market focus on quality and valuation as the strong earnings upgrade cycle appears to fade?

Time to read: 2 min

Confidence in global synchronized economic growth has fostered a momentum-driven market since early 2017, with many investors buying companies with positive earnings outlooks but showing little regard for valuations. This type of market can be tough for the Invesco International and Global Growth team, as valuation is an important aspect of our Earnings, Quality and Valuation (EQV) investment process. In recent months, the market narrative has been shaken by concerns over trade wars, political uncertainty and a moderation in economic growth outlooks. We believe that portfolios built with our well-balanced EQV philosophy should be well-positioned to potentially benefit when the market refocuses on quality and valuation.

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