Goldman Sachs has lifted its 12‑month price target for the pan‑European STOXX 600 index to 695 points, up from the previous 660‑point forecast, implying roughly a 5.5 % upside from the index’s current level. The revision reflects the bank’s view that Europe is entering one of its strongest earnings seasons in recent years, with aggregate earnings growth for the index’s constituents projected at 23.4 % according to LSEG I/B/E/S data covering 268 companies with reported results and estimates for the remainder.
Goldman strategists note that the earnings strength is being driven by higher profits in the energy and materials sectors, which are offsetting weaker demand in other areas of the economy. They also argue that European equities remain cheaper than their U.S. counterparts while offering relatively attractive shareholder returns through dividends and share buybacks.
Since the start of the year the STOXX 600 has risen 11.3 %, trailing the S&P 500’s 13.9 % gain, despite ongoing concerns about energy supply. The bank cautions that a prolonged energy shock remains a major risk for Europe, given the region’s continued reliance on imported energy, which could dampen investor risk appetite.