UBS sees 8% upside potential for European stocks by year-end, supported by corporate earnings and the AI trend.
UBS has raised its Stoxx 600 target to 690 points, approximately 8% higher than the current level. Most strategists believe corporate earnings and the AI investment trend will support the market, even though geopolitical risks persist.
On July 17, 2569 at 13.33:XNUMX p.m., Bloomberg News reported that Investment strategists are taking a more positive view of European stock markets. Following strong earnings growth for listed companies, the market is believed to be able to cope with volatility from geopolitical factors.
A Bloomberg survey. Found that UBS is the most optimistic institution, raising its year-end 2569 Stoxx Europe 600 index target to 690 points, or about 8% higher than the current level. Bank of America, Deutsche Bank, and Kepler Cheuvreux have also successively revised their index targets upwards.
Based on a survey of 18 strategists. The average forecast for the Stoxx 600 index at the end of the year is 647 points, less than 1% higher than the current level. However, the number of those who believe the market will decline has dropped to only 5, reflecting a decrease in negative sentiment.
Gerry Fowler, a strategist at UBS. specify that The downside risk to the market is decreasing, while positive factors are increasing, particularly in the AI, banking, and industrial sectors. Healthcare, consumer goods, and luxury goods stocks also continue to show strong performance.
European stock markets hit new highs this month as investors returned to the market following easing concerns about a potential war with Iran. Despite renewed tensions, oil prices remained about $40 per barrel below their April peak, allowing the markets to remain stable.
Another important factor is the upward revision of earnings estimates for listed companies, by... Citigroup specify that The European (excluding the UK) earnings forecast index has hit its highest level in five years, and 80% of industry sectors have now seen upward revisions in earnings forecasts.
Analysts expect earnings per share (EPS) of listed companies in Europe to grow 14% in 2026 and 10% in 2027, with second-quarter earnings reports already beginning to reflect this trend.
According to Bloomberg Intelligence. specify that More than 45% of companies that have reported earnings have outperformed analysts' expectations, while only 27% came in below expectations. Overall profits also grew by 11.6% year-on-year.
However, some strategists remain cautious, with Societe Generale expecting the Stoxx 600 index to fall to 600 points by the end of the year, as they believe the market has already largely reflected the earnings recovery and still faces risks from conflicts in the Middle East, the US midterm elections, trade tariffs, and rising bond yields.
side A survey of fund managers by Bank of America. It was also found that... Sentiment in European stock markets has turned positive again, with 54% of respondents expecting European stocks to rise in the coming months, a significant increase from June when net positive sentiment was only 4%.
Barclays analysts I think that Although European stock valuations remain attractive and corporate earnings are strong, the direction of oil prices remains a key risk factor to monitor in the coming period.
refer : www.bloomberg.com
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