Goldman Sachs Boosts European Equity Target to 695 Amid Strong Earnings

Goldman Sachs has raised its target for the STOXX Europe 600 Index to 695, citing solid corporate earnings and a resilient European economy. The bank sees about 5.5% upside from current levels.

The target increase reflects the pace at which European corporate profit growth is exceeding market expectations. According to LSEG IBES data, aggregate profit growth for STOXX Europe 600 constituents in the April, June 2026 quarter is projected at 23.4% year over year.

Goldman's strategists argue that European equities trade at a discount to U.S. stocks while offering comparatively high shareholder returns through dividends and buybacks. Despite concerns over energy supply, improving fundamentals are beginning to outweigh valuation discounts.

A prolonged energy shock remains a significant risk, with Europe highly dependent on energy imports. If supply concerns materialize, the impact could spread broadly across corporate earnings and investor sentiment.