The largest banks on Wall Street and in Europe continue to ramp up bullish sentiment toward European stocks. Analysts at leading financial conglomerates, including UBS and Deutsche Bank, have significantly raised their targets for the Stoxx Europe 600 index, expecting growth of up to 8% by the end of this year.
Specifically, UBS adjusted its annual target for the Stoxx 600 from 630 to 690 points. This decision is backed by confidence in rising corporate profits, which the bank's strategists believe will continue despite ongoing geopolitical tensions. UBS's 2026 forecast (690 points) is even higher than JPMorgan's (680 points), which was previously considered the most optimistic. Bank of America, Kepler Cheuvreux, and other giants have also joined the upward revision of forecasts.
Growth Drivers and Current Dynamics
The European stock market has already fully recovered its first-half losses and hit new all-time highs. On July 3, the index recorded a record at around 652 points. The current correction to 639 points does not worry analysts—total returns since the start of the year exceed 7%. The reduction in geopolitical risks, linked to a ceasefire in the Middle East, has revived the upward trend. UBS also presented a long-term forecast: by 2027, the index could reach 760 points, implying growth of 19% over the next year and a half.
Analysts note that growth drivers include the artificial intelligence sector, stable revisions in the banking sector's performance, and reduced pressure from defensive industries. This creates an extremely favorable environment for a bullish scenario.
Bears Are Not Giving Up, But Their Numbers Are Shrinking
However, the consensus forecast among 18 surveyed strategists is more cautious: on average, they expect the index to rise to only 647 points by year-end—less than 1% from current levels. Nevertheless, the number of bearish forecasts is declining. Only 5 out of 18 respondents expect a decline, and just two predict a drop of more than 5%.
The most pessimistic assessments come from TFS (a decline of 9%, to 585 points) and Societe Generale. The latter's strategist, Roland Kaloyan, warns: high expectations leave no room for disappointment. Any deviation from the profit forecasts priced into the market could negatively impact its dynamics. "The main risk is not a lack of profit growth, but that the recovery turns out weaker than expected," he explains.
My expert opinion: The market is in a phase of euphoria over macroeconomic stability and strong corporate reports. However, as practice shows, unexpected corrections often occur precisely at moments of maximum consensus. I would recommend investors remain cautious and not chase the "last point" of growth, especially considering that 45% of companies have already reported better-than-expected results—meaning "good news" is already largely priced in.