Profitability and Asset Prices in European Stock Markets

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The paper analyzes profitability patterns in the stock markets of Germany, France, and Italy, confirming that more profitable firms generally achieve higher risk-adjusted returns. It aligns with prior European research, highlighting the presence of profitability anomalies in Germany and France, while these anomalies are notably absent in Italy. The study identifies five out of seven profitability measures as effective in detecting these anomalies, contributing valuable insights to asset pricing and management within the context of European financial markets.