UBS Sees 19% Upside for European Stocks, Lifts Stoxx 600 Target
Yahoo Finance ·
UBS Sees 19% Upside for European Stocks, Lifts Stoxx 600 Target Khac Phu Nguyen Fri, July 10, 2026 at 8:13 AM EDT 2 min read UBS This article first appeared on GuruFocus . UBS Group ( NYSE:UBS ) strategists have projected further gains for European stocks as resilient earnings and a broader market rally continue to support investor sentiment. Gerry Fowler and Sutanya Chedda raised their year-end target for the Stoxx Europe 600 Index to 690 from 630, suggesting potential upside of about 8% from current levels. Their forecast is now the highest among strategists tracked by Bloomberg, exceeding the previous top target of 680 set by JPMorgan Chase & Co. ( NYSE:JPM ) strategist Mislav Matejka last month. UBS also expects the rally could continue into 2027, setting a target of 760 that implies a potential 19% increase over the next 18 months. Warning! GuruFocus has detected 6 Warning Sign with UBS. Is UBS fairly valued? Test your thesis with our free DCF calculator. Fowler and Chedda said stronger-than-expected earnings resilience has made them less cautious about the European market. The strategists identified three developments supporting their outlook: stronger artificial intelligence-related earnings upgrades, continued positive revisions for banks and reduced pressure from large defensive sectors as the euro weakens. These changes could support earnings growth of more than 10% while also allowing European stocks to trade at higher valuations. Analysts are currently expecting approximately 12% profit growth during the second-quarter reporting period, with earnings estimates continuing to rise ahead of company results. European stocks have recovered from losses triggered by the war in Iran, while more recent increases in geopolitical tension have so far not been enough to stop the rally. Although economic indicators have remained mixed, UBS believes the upcoming earnings season could show that European companies are performing better than the broader economic narrative suggests. Investors are expected to focus on whether AI-related upgrades continue, banks maintain positive earnings revisions and defensive sectors finally stabilize. Positive developments across those three areas could reinforce the recent improvement in market sentiment and provide further support for European equities.
DYAX Investor Sentiment
Bullish (Long) 34% · Bearish (Short) 66%
373 participants
Related News
- HSBC's top picks heading into earnings season
- Sanofi wins FDA nod for injectable multiple myeloma therapy
- Caldwell Partners International raises dividend by 50% to CAD 0.015
- 3 Unpopular Stocks with Open Questions
- Microsoft Reports 25% Emissions Jump as AI Data Center Expansion Accelerates
- Meta Weighs Renting AI Compute as Cloud Business Takes Shape