Morning Star Europe Index It rose 4.9% in May, the highest month since January 2025, when technology stocks led the market recovery, and has grown nearly 10% annually. Although positive returns were seen in all segments of the Morningstar style box, index performance was suppressed by large blend stocks.
The relative performance of large blending companies is due to some shares such as Sanofi. Sunlost 4.7%, LVMH MCa 2.0% decrease in the euro.
Within the large cap segment, growth style was the biggest winner, rising 7.1% in the euro thanks to strong profits from companies such as semiconductor company ASML Holding. ASML12.3% rises and defends Rheinmetall rhm26.3% increase, and utilities Siemens Energy Entrrose 26.6%. Over the past year, big-growth stocks have grown by 15.9%, while big-value stocks are 16.2% ahead.
At the sector level, technology was the most profitable last month, with the euro rising 8.65%. Not only did ASML rise strongly, but so did stocks such as payment processor Adyen Adieenwhich rose 19.2%, semiconductor company Infineon Technologies AG IFXachieved 18.6%.
European banking sector outperforms
The large value segment also achieved market returns, up 5.8% in the euro thanks primarily to the banking sector. The three stocks that contributed the most to the positive performance of this market segment were the three major banks: Banco Santander Sunup 13.7%, HSBC HSBA7% increase, BNP Pariva BNPwon 10.3% in the euro. Overall, the European Financial Services sector outperformed the market in May, earning 6.40% profit.
The consumer defense sector was the worst performance, earning only 1.73% in the euro. The sector has declined significantly due to a decline in stocks such as L’Oreal. orit fell by 2%, the Imperial Brand IMBlost 6.3%, Diageo dgea 2.5% decrease.
European small stock prices have the most undervalued stock
As for valuation, the most valuable styles within all segments with price/fair value of 0.75 were the most undervalued at the end of May. The big growth style was the most overvalued, with a price/fair value of 1.03. This is a change from the end of April valuation, when large growth stocks were screened for being slightly undervalued.
Currently, the growing stocks are undervalued, but at the end of April it was undervalued, with a price/fair value of 1.07.
Of the nine Morningstar Style box segments, seven were underrated at the end of May, and two were overrated.
A price/fair value below 1 means that the inventory is undervalued, while a price/fair value above 1 indicates that the stock is overvalued.
The biggest change in the estimates of Morning Star Fair Values for European Stocks
In May, the biggest increase in fair value for the percentage terms was for the BAE system. ba. Natwest Group, from £15.50 to £22.50 he360p to 480p, intesa sanpaolo ISPfrom 3.50 to 4.50 euros, and general gfrom 25.05 euros to 30.00 euros.
The biggest downward revision of fair value was for BASF BASfrom 60 euros to 56 euros, Novo Nordisk New bDKK 640 to DKK 595, and Mercedes-Benz Group MBGfrom 106 euros to 90 euros.
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