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6 European Undervalued Wide Moat Stocks

SAP and Edenred are among the wide-moat stocks currently trading at a discount of more than 40% to their fair value.

Illustrazione della volatilità del mercato con immagini di un uomo con un binocolo, un indicatore di borsa e monete all'interno di maschere a forma di freccia verso l'alto e verso il basso.

Despite strong market volatility as a result of the Iran war, European stock markets are still higher in 2026. The Morningstar Developed Market Europe Index has gained 4.56% since the beginning of the year (as of April 14), but sector performance has been quite mixed. While energy, utilities, and raw materials have posted gains of more than 10%, consumer goods stocks fared significantly worse, particularly consumer cyclicals, which have suffered double-digit losses, and stocks in the finance, healthcare, and real estate sectors, which have underperformed the market.

Stocks have been selected from the Morningstar Developed Market Europe Index with a high competitive advantage, namely an economic moat of wide, and which are currently trading on the market at a discount rate greater than 40%. This 40% discount provides a sufficiently high margin of safety to prevent short-term volatility from causing a capital loss in the portfolio.

European Undervalued Stocks With Wide Moats

Here are the key metrics and commentary from Morningstar analysts.

Edenred Group

Edenred shares have fallen nearly 40% over the past 12 months and are now trading at a 50% discount to their fair value of EUR 37.00. The French company’s stock price recently experienced a jolt following news of an investigation by the Italian Competition Authority (AGCM) into alleged abuse of a dominant position, but the stock has recovered the steep losses caused by the selloff following the news.

“We assign Edenred an economic moat of Ample due to network effects in its food stamps and mobility businesses. In our view, network effects occur when the value of goods or services increases for both new and existing users as more customers utilize them. The company has demonstrated its ability to attract merchants, employers, and employees to its network. This has led Edenred to become the global market leader in food stamps and the third-largest mobility operator, with a leading position in Latin America,” said Ben Slupecki, equity analyst at Morningstar.

“Despite the recent news, we continue to believe the market has over-pushed the stock and is overlooking the long-term benefit of industry regulation in preserving Edenred’s moat.”

SAP

Over the past 12 months, SAP SAP shares have fallen 37% and are now trading 46% below their fair value of EUR 265.00. The German company is suffering from a negative sentiment in the software industry, which is weighing on concerns that artificial intelligence could undermine the competitive advantage of many companies.

“Cloud backlog growth in the fourth quarter was below expectations, and this signal of weakness has led to a disproportionate negative market reaction. However, we believe it highly unlikely that AI will undermine SAP’s deeply entrenched position in its customer business,” says Rob Hales, senior equity analyst at Morningstar.

“SAP is the world’s largest provider of business application software and the global market leader in enterprise resource planning (ERP) software. We believe SAP enjoys a broad competitive advantage based on customer switching costs for the majority of its software portfolio, particularly its ERP products and the HANA database, which account for approximately 75% of total revenue.”

Coloplast

Coloplast, a Danish company and world leader in ostomy and incontinence care, has fallen 38% in the last year and is now 43% below its fair value of DKK 760.00.

“Coloplast has a long history of consistent innovation, which has allowed it to achieve a dominant position in Europe and steady growth in the United States. Since 2008, the company has done an admirable job of reducing its cost structure while focusing on profitable growth. Coloplast is currently adjusting its strategy to drive growth by entering new geographies, with a particular focus on the United States,” says Debbie S. Wang, senior equity analyst at Morningstar.

“Coloplast has built a strong advantage in its industries by leveraging intangible assets, such as patents, and the high switching costs borne by its customers. Furthermore, the company has a long history of innovation, which has allowed it to offer superior products to the market compared to its competitors.”

Elekta

Although Elekta shares have gained 17% over the past 12 months, they remain 45% below their fair value of SEK 100.00.

“Elekta, a leader in treatment planning systems for neurosurgery and radiation therapy, will benefit from the favorable trend pervading the entire industry. Although radiation therapy is considered a ubiquitous form of cancer treatment, its adoption has yet to increase. Recent technological advances, allowing for higher doses and more precise radiation delivery, and growing awareness of the benefits of radiation therapy are expected to significantly expand the market. The opportunity presented by radiation therapy is particularly attractive in emerging markets, where its use rates are significantly lower than in the developed world,” says Alex Morozov, regional director of equity research at Morningstar.

“Globally, only a few companies are involved in the radiotherapy sector, with Siemens Healthineers and Elekta holding the largest market shares. The radiotherapy equipment sector is characterized by very high barriers to entry, represented by the extensive intellectual property and technological know-how required for equipment production, and by high switching costs, resulting from the costs of training equipment personnel and the risk of business interruption. For these reasons, we assign Elekta an economic moat of Large”.

Adyen

Adyen shares have seen their market capitalization decline 35% over the past year and are now 43% below their fair value of EUR 1,620.00.

The stock suffered sharp losses following the company’s announcement of its 2026 guidance, which coincided with the release of its second-half results. Adyen reported 17% revenue growth in the second half of last year, but the market was disappointed by the downward revision to its net sales growth forecast for 2026. Management now expects revenue growth to be between 20% and 22%, compared to the 20% to 25% range announced last November.

“Adyen emphasized that the guidance update was made following discussions with clients about their growth expectations and therefore does not reflect a change in long-term growth prospects,” says Niklas Kammer, senior equity analyst at Morningstar. “Adyen is a payments company that provides merchants with a single platform to accept e-commerce, mobile, and POS payments in multiple countries using various payment schemes and methodologies. We assign the Dutch company an economic moat of Large due to the benefits generated by the network effect. Adyen’s customers who feed payment volumes onto the platform provide a data advantage for payment routing, fraud detection, and authorization optimization, benefiting all platform customers”.

Prosus

Although Prosus stock has lost nearly 20% of its market capitalization since the beginning of the year, its annual results are still positive, indicating a gain of more than 10%. At current market prices, the Dutch company’s shares are still 41% below their fair value of EUR 72.00.

“Prosus represents a unique investment opportunity as a technology investment firm. Prosus holds a 23% stake, representing approximately 80% of its net assets, in Tencent, a leading gaming company also active in advertising, payments, cloud computing, music streaming, and several other businesses. In addition to Tencent, Prosus has invested in over 100 technology platforms ranging from online delivery to fintech, classified ads, and edtech. Prosus’ ultimate goal is for these investments to grow faster than Tencent, setting ambitious revenue and profitability targets. We believe profitable growth is achievable as many of Prosus’ businesses expand,” said Verushka Shetty, an analyst at Morningstar.

“We view Prosus as an investment holding company rather than an operating company and therefore assign it a moat of Large based on the sum of the components of its underlying investments, particularly its investment in Tencent, which we assign a moat of Large.”

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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