Infrastructure and Construction

Germany’s historic shift on fiscal expansion is set to reshape Europe’s economic landscape, unlocking a wave of public spending that could boost growth across the eurozone.

With hundreds of billions of euros expected to flow into defence, infrastructure, and energy, investors are eyeing key stocks poised to benefit.

Goldman Sachs analysts have identified 12 buy-rated European companies outside the defence sector that could ride this spending boom, spanning industries from airport operations to renewable energy.

A fiscal turning point: Investors shift focus from the US to Europe

Germany’s government-in-waiting is setting the stage for a historic departure from its traditionally conservative fiscal approach

The CDU/CSU and SPD-led coalition unveiled a €500 billion off-budget infrastructure fund—equivalent to 11.6% of GDP in 2024—to be deployed over the next ten years. This fund aims to revamp the country’s ageing infrastructure, accelerate the energy transition, and boost housing and transport investments.

In a further break from its traditionally strict fiscal orthodoxy, the government will exempt defence spending exceeding 1% of GDP from the constitutional debt brake—a rule that limits new borrowing—effectively unlocking an additional €11 billion per year for military upgrades.

Additionally, Germany will ease fiscal constraints on its regional states, raising the structural deficit allowance from 0.0% to 0.35% of GDP

Goldman Sachs economists have raised their German GDP growth forecasts for this year and 2026, citing stronger fiscal stimulus. This revision also prompted an upgrade to eurozone growth projections, with the European Central Bank’s (ECB) terminal interest rate forecast now set at 2%.

By contrast, US growth forecasts have been downgraded, weighed down by rising tariffs and weaker-than-expected expansion under President Donald Trump.

“There has been a material repricing of reflation risk in Europe versus the US across assets,” said Christian Mueller-Glissmann, CFA, at Goldman Sachs.

Who stands to gain from Germany’s fiscal shift?

Amid this evolving economic landscape, Goldman Sachs has identified 12 Buy-rated European stocks—outside the defence sector—that stand to benefit from the anticipated spending boom

anies span industries ranging from construction and logistics to energy and real estate, making them key players in Germany’s economic revolution.

Infrastructure and Construction

Eiffage – The French construction giant is well-positioned to gain from increased defence-related projects in both France and Germany. The company has already secured a €7 billion building renovation contract for the French Armed Forces, with further potential for its defence-focused Clemessy subsidiary.

Sika – The Swiss building materials firm could benefit from the push for sustainable construction, as its mortars and additives help reduce the carbon footprint of high-emission industries like concrete production.

Transport and Logistics

Fraport – Frankfurt’s airport operator could see gains from potential corporate tax cuts and reduced aviation taxes. Its newly expanded Terminal 3, set for completion in 2025, will also support growth. “Fraport raised its airline fees at a pace higher than expected,” said Patrick Creuset, an analyst at Goldman Sachs.

DHL – The logistics giant is poised for upside if Germany’s fiscal expansion fuels a broader economic acceleration across Europe, driving increased shipping demand.

Energy and Utilities

E.ON – As Europe modernises its aging power grid, Germany’s fiscal policies could unlock long-term growth for energy players. E.ON derives two-thirds of its EBITDA from power grids, with Goldman Sachs analysts seeing an “underappreciated opportunity” from electrification trends.

RWE – A re-industrialisation effort in Germany could drive power demand growth by one percentage point per year, boosting investment across the electricity value chain. Analysts expect this to translate into higher returns in renewables, flexible generation, and power grids.

Siemens Energy – The German government’s potential plan to develop 20 gigawatts of gas power plants by 2030 could fuel growth for Siemens Energy, whose gas service business contributed 31% of group revenue in 2024. “Comments on new gas plants are supportive for Siemens Energy,” said Ajay Patel, a Goldman Sachs analyst.

Nordex – The wind turbine manufacturer has increased its European exposure, with the region now accounting for over 80% of its order backlog. Government support for renewable energy is expected to enhance its market position.

Chemicals and Manufacturing

BASF – The German chemicals giant is approaching a financial turning point, with Goldman Sachs analysts anticipating a sharp free cash flow improvement in 2026 as it monetises a €10 billion investment in China. Analysts also highlight the company’s commitment to returning at least €12 billion to shareholders through dividends and buybacks between 2025 and 2028.

Additionally, any potential reinstatement of Russian gas imports into Europe would favour BASF, given its energy-intensive operations.

Akzo Nobel – The Dutch coatings company is expected to see a “meaningful volume improvement” from 2026 onwards. “Akzo’s shares are trading at a significant discount to historical averages,” said Goldman Sachs’s Georgina Fraser, PhD, adding that European fiscal expansion and post-war reconstruction in Ukraine could provide further tailwinds.

Geberit – Switzerland-based Geberit, a leader in sanitary appliances, could benefit from Germany’s push for new housing. With nearly 30% of its sales coming from Germany, it stands to gain from any government efforts to alleviate the housing shortage.

Real Estate

Vonovia – Germany’s largest residential property group could benefit from public investment in housing and infrastructure. Government incentives to modernise properties could help Vonovia expand its non-rental revenue streams, which it aims to grow to 25% of EBITDA by 2028.

“The new policies could incentivise private homeowners to modernise their properties by leveraging subsidies and tax incentives,” said Jonathan Kownator, a Goldman Sachs analyst.

By 2028, the company aims to increase EBITDA from non-rental revenues—such as development—to as much as 25%.

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