Jefferies has singled out a group of 15 European companies that it views as candidates for recovery should geopolitical tensions abate after a bout of airstrikes on Iran that began after markets closed on February 27, 2026. The brokerage reports that global equities have retreated about 5% from their peak, with European markets trailing broader indices.
The firm examined over 800 stocks within its European coverage universe and concentrated on large-cap, liquid names that are trading below recent highs. In its sector-level review, Jefferies notes that energy is the only sector to record positive absolute returns since late February. By contrast, consumer and cyclical sectors have lagged amid expectations of stagflationary pressure.
Top picks highlighted by Jefferies include ArcelorMittal (AMS:MT), Carlsberg (CSE:CARLB), Credit Agricole (EPA:ACA), Diageo (LSE:DGE), EssilorLuxottica (EPA:EL), Ferrari (NYSE:RACE), Heineken (AMS:HEIA), Inditex (BME:ITX), Infineon (ETR:IFX), and Rheinmetall (ETR:RHM). The report indicates the firm is maintaining underweight positions in these names, with underweights ranging from 20% to 62%.
Additional opportunities flagged by Jefferies are Rolls-Royce (LSE:RR), Saint-Gobain (EPA:SGO), Segro (LSE:SGRO), Siemens (ETR:SIE), and Siemens Healthineers (ETR:SHL). The brokerage points to a variety of supportive factors for these selections, including management turnarounds, strategic repositioning, and structural market tailwinds.
Jefferies also observes that global equity markets began 2026 with historically low volatility, prior to the onset of the recent conflict. The firm says it expects a sharp snapback in affected stocks if geopolitical tensions continue to ease, while conceding that the long-term effects of the current conflict are hard to quantify at present.
This analysis underscores a differentiated market landscape: energy is the only sector posting positive absolute performance since late February, while consumer and cyclical areas have underperformed on stagflationary concerns. The selections reflect Jefferies focus on liquidity and relative valuation among large-cap European names trading beneath recent peaks.
Methodology note - Jefferies coverage universe exceeds 800 European stocks and the firm filtered for large-cap, liquid names below recent highs to compile the 15 highlighted names.