Goldman Sachs Group and JPMorgan Chase are among the most optimistic major banks on the outlook for European equities, buoyed by stronger-than-expected corporate earnings growth, according to a Bloomberg survey of market strategists. Goldman Sachs analysts have raised their quarterly target for the Stoxx Europe 600 index to 670 points — implying roughly a 3% gain from Wednesday’s close — while JPMorgan sees the benchmark rising toward 680 points from its current level of around 650.
A Strong Year Ahead for European Equities
On average, 15 leading strategy teams forecast the Stoxx 600 will end the year near 651 points — representing an approximate 10% annual rally. If realized, this would mark the fourth consecutive year of gains for the index, extending Europe’s longest bull run since 2015.
“Europe has performed far better than almost anyone expected at the start of this year,” said Sharon Bell, senior European equity strategist at Goldman Sachs. She noted that investor attention has been disproportionately focused on a handful of U.S. and Asian companies, leaving European markets underappreciated despite robust fundamentals.
Record Highs Driven by Earnings Strength
The Stoxx 600 has reached record highs as corporate profits across the region consistently surpassed analyst expectations. Improving macroeconomic conditions have provided reassurance amid disappointing U.S. economic data, while investors are broadening their exposure to European stocks expected to benefit from rising corporate capital expenditure in artificial intelligence.
Market Forecasts Lagged Reality
Market expectations underestimated the pace of the rally. In December, strategists projected an average 7% rise in the Stoxx 600 through the end of 2026 — with even the most bullish forecasts targeting 650 points, a level already achieved earlier this year.
Calm Amid Geopolitical Shock
Analysts maintained composure following the outbreak of U.S.-Iran tensions in February, expecting economic resilience despite a sharp spike in oil prices. That view proved accurate: companies reported the strongest second-quarter profit margins in years.
Still, risks loom heading into year-end — including prolonged geopolitical tensions, oil prices up 30% from their July lows, and global bond yields reaching decade-high levels.