We recently published a list of 12 Best Italian Stocks to Buy in 2025. In this article, we are going to take a look at where Natuzzi S.p.A. (NYSE:NTZ) stands against other best Italian stocks to buy in 2025.

As per Deloitte, the broader Italian economy slowed down in 2024, with moderate growth. The service sector expansion was contrasted with continued weakness in essentially all other sectors, mainly in manufacturing and automotive. The consumer and business sentiments in Italy were low across 2024, in the context of weakness in the critical economies of the euro area too.

On the supply side, the broader GDP growth was only supported by the services sector in 2024, while essentially all other sectors witnessed a decline. With these impacts now behind us, what lies ahead for the broader Italian economy?

Inflation Is Expected to Remain Moderate, Says Deloitte

In Italy, inflation slowed down in 2024 and remained the lowest for well-established European economies, added Deloitte. That being said, electricity and gas prices were higher in Italy in comparison to other large European economies including France and Germany, influencing the competitiveness of Italian companies. In 2025, Deloitte sees inflation to remain below the levels expected in the euro area and the ECB target of 2%.

Therefore, moderate inflation, along with nominal wage growth, can result in a gradual recovery in real wages. In general, the broader Italian labor market witnessed a contraction last year. Notably, while the number of employed people continues to increase, hours worked have witnessed a decline, primarily in the industrial sector. Deloitte believes that the broader Italian economy will maintain moderate positive growth in 2025, mainly in line with the anticipated average for euro-area economies. While it can face slightly higher consumer inflation, the levels will be lower than the euro area average. BNP Paribas believes that Italy still has the second lowest inflation in the Eurozone after Ireland. However, as elsewhere, inflation increased in January because of less energy deflation.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

GDP Expansion on the Cards, Says Allianz Trade

As per Allianz Trade, Italy witnessed a strong recovery from the pandemic and was one of the best performers among the 4 major Eurozone economies. Even though GDP is now 5.6% above pre-pandemic levels, the broader economic activity witnessed a slowdown in recent quarters. It even stagnated (in real quarterly terms) in Q3 2024. However, private consumption growth resumed in 2024, with confidence recovering alongside the strong decline of inflation.

Story Continues

Moving forward, Allianz Trade sees private consumption picking up due to a recovery in income and an easing of monetary policy. Notably, a catch-up in NGEU spending is expected to make up for the partial recovery of investment activity. In 2025, the firm anticipates GDP to expand by 0.8%, followed by 1% in the following year.

Our Methodology

To list the 12 Best Italian Stocks to Buy in 2025, we used a screener and sifted through several online rankings. Next, we chose the companies having headquarters in Italy and in which analysts saw upside potential. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 10. We also mentioned hedge fund sentiments from Insider Monkey’s database of 900 elite hedge funds, as of Q3 2024.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).Is Natuzzi S.p.A. (NTZ) the Best Italian Stock to Buy in 2025?

An engineer in front of a complex network security system, monitoring for potential threats.

Natuzzi S.p.A. (NYSE:NTZ)

Number of Hedge Fund Holders: N/A

Average Upside Potential: ~371.3%

Natuzzi S.p.A. (NYSE:NTZ) is engaged in the design, manufacture, and marketing of leather and fabric upholstered furniture. It has its headquarters in Santeramo in Colle, Italy. The company continues to see growing evidence of the strength of its long-term Brand/Retail project, which has been gaining momentum, making the conditions favourable to capture the full potential of the brands. Natuzzi S.p.A. (NYSE:NTZ) remains confident that its brands and retail strategy are well-placed for strong growth and it continues to focus on executing the long-term plan.

The company’s long-term plan includes improving the quality of Natuzzi S.p.A. (NYSE:NTZ)’s distribution to accelerate the Brand journey, fostering new market opportunities, enhancing margins, production simplification, and efficiency improvement, among others.Natuzzi S.p.A. (NYSE:NTZ) remains focused on optimizing its operating model and reducing costs throughout factories and offices in Italy and abroad.

The company continues to conduct a comprehensive review of its industrial operations in a bid to simplify processes, reduce working capital, and fuel further efficiencies. Natuzzi S.p.A. (NYSE:NTZ)’s efforts to optimize the footprint of its Asian operations continue to progress as planned. In Q3 2024, it completed the closing of its historical factory in Shanghai and shifted the production to the new plant located in Quanjiao, Anhui Province, China. The new plant will serve exclusively the Chinese market and provide industrial and transformation costs that are ~30% lowercompared to the Shanghai plant.

Overall, NTZ ranks 2nd on our list of best Italian stocks to buy in 2025. While we acknowledge the potential of NTZ as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NTZ  but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.

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