A potential recession, high inflation levels and uncertainty around energy markets are just some reasons why investors are steering clear of Europe right now – but Goldman Sachs remains positive on a number of stocks in the region. The investment bank updated its “conviction list – directors’ cut” stocks to buy in Europe in an Oct. 31 note, describing it as “a curated list of our most differentiated fundamental Buy ideas across our European coverage.” Chip stock addition One notable update to Goldman Sach’s directors’ cut list was the addition of ASML Holdings – a Netherlands-headquartered chip machine-maker that has Taiwan Semiconductor Manufacturing Company ( TSMC ) as its biggest customer. The stock trades on both the Euronext Amsterdam and Nasdaq. Year-to-date, the stock is up over 15% despite a slide over the last three months following a cyclical slowdown in the semiconductor sector and significant cuts to estimates for 2024. Investors are also monitoring potential further cuts to earnings estimates of its clients — some of the world’s biggest chipmakers. ASML-NL YTD mountain Year-to-date share price of ASML Holdings Goldman remains bullish on ASML, thanks to its “multi-year growth story with de-risked near-term estimates.” The bank expects the stock to hit 785 euros in the next 12 months, giving it a 42% upside from its close on Oct. 30. Stocks on the list British telecommunications player BT Group made the investment bank’s updated directors’ cut list – with an upside of around 149% from its Oct. 30 close, based on a 12-month price target of £280 ($340.68). Goldman sees the company benefitting from opportunities in digital infrastructure fiber monetization and sustainable free-cash-flow improvements. Delivery Hero is another favorite stock, with a price target of 53.90 euros ($57.04), giving it an upside of approximately 128%. The German delivery company is seen as a ” market leader benefitting from a more rational competitive landscape,” Goldman’s analysts wrote. German real estate player Vonovia was another company that made the investment bank’s list with 75% upside based on a 12-month price target of 36.70 euros. Its exposure to the German residential market and progress on disposals to close its valuation gap, make it an attractive play, Goldman’s analysts noted. Not ‘all that attractive’ Goldman Sachs has penciled in between 3% and 7% earnings-per-share growth of the pan-European Stoxx 600 index between 2023 and 2024, on the back of higher commodity prices and bond yields. With annual earnings-per-share growth of European stocks expected to be around 5% from now until 2025, and just 2% after being adjusted for inflation, they do “not screen all that attractive,” especially when compared to U.S. TIPS (treasury inflation-protected securities) which are less risky and yield returns of around 2.5%, the bank’s analysts wrote. They are thus focused on identifying quality growth and select value stocks for their their conviction list of top buy-rated stocks. — CNBC’s Michael Bloom contributed to this report.