Key facts
- European corporate earnings forecasts have risen for nine consecutive weeks.
- STOXX 600 companies are now expected to achieve 24.1% aggregate earnings growth.
- Energy sector profits are projected to increase by 138.6%.
- Basic materials and industrials sectors are showing significant recovery.
- Industrial earnings are forecast to grow by 18.1%.
- Overall revenue is expected to increase by 11.2% year-on-year.
European corporate earnings forecasts have continued to improve for a ninth consecutive week, indicating a recovery that extends beyond the energy sector. The STOXX 600 index is now anticipated to see aggregate earnings growth of 24.1%, an increase from the previous week's 23.4% estimate, according to LSEG I/B/E/S data.
While energy companies are still projected to lead with a substantial 138.6% profit jump, driven partly by disruptions in the crude oil market, the recovery has broadened to cyclical sectors. Basic materials and industrials are emerging as secondary growth engines, with industrial earnings expected to rise 18.1% following strong results from manufacturers like FLSmidth and Geberit. Excluding energy, STOXX 600 profits are forecast to grow by 13.1%.
Overall revenue expectations remain more modest, with sales projected to increase 11.2% year-on-year, a slight dip from the prior week's estimate. Despite the positive earnings trend, geopolitical uncertainty and rising bond yields continue to pressure the STOXX 600, which recently fell to a two-week low. Market focus remains on Europe's ability to replenish gas storage ahead of winter at reasonable prices, a key source of ongoing uncertainty.