Investing.com -- UBS highlighted Adyen (AS: ADYEN ), Aryzta, and Moonpig Group, one of its top European stock ideas for 2025, given their growth potential. The brokerage emphasized on opportunities amidst structural shifts and economic challenges.

Brokerage picked Marks & Spencer (OTC: MAKSY ) for value, and Telenor Group for dividend yield.

The European economy is forecast to grow modestly, with GDP up 0.9% in 2025 and inflation easing to 2.1%. UBS expects the European Central Bank to cut rates to 2% by mid-2025, balancing inflation control and fragile growth. Fiscal policies in the UK and core EU economies are selectively stimulative, supporting green initiatives and digital transformation.

Despite subdued sales and flat earnings growth in 2024, UBS projects a 5% earnings decline in 2025 due to margin pressures from higher input costs and softer demand. The Stoxx 600 is expected to end 2025 at 470, reflecting a modestly negative return.

Internationally, UBS favors RELX Group for growth and Reckitt Benckiser (LON: RKT ) for dividends.

"Much like a snake coiling with intention before striking, this year calls for calculated precision to capitalise on secular trends while sidestepping vulnerabilities,” UBS noted.