European stocks are poised for new highs this year, driven by stronger earnings and a widening market rally, according to UBS Group AG strategists who are now the most bullish forecasters tracked by Bloomberg. The analysis identifies European companies where analyst consensus price targets suggest substantial upside from current share prices, indicating potential undervaluation by the market.

To identify these opportunities, a screener filters for European-listed stocks with meaningful upside to analyst targets, combined with liquidity and quality metrics. Key filters include average daily volume above 100,000 shares, market capitalization exceeding $300 million, and a price above $1. Crucially, companies must have analyst coverage from at least 10 analysts and an upside potential of over 30%.

Beyond the headline upside figure, investors are advised to consider factors such as analyst coverage depth, fundamental health, and valuation. While analyst targets offer valuable insights, they should be integrated with a broader analysis of valuation, business quality, earnings trends, and risk assessment. High expected upside may sometimes signal underlying uncertainty or recent share price weakness, necessitating a comprehensive due diligence approach.