Goldman Sachs Boosts Eurozone Stocks Target Amid Earnings Strength

Goldman Sachs has raised its target for the Stoxx 600 index to 695 points, citing strong corporate earnings and resilient economies across Europe. The investment bank now expects a 5.5% upside from current levels.

The Stoxx 600 has advanced 11.3% year-to-date, outperforming the S&P 500's 13.9% increase despite energy supply concerns. Goldman Sachs notes that European equities remain cheaper than U.S. stocks while offering relatively high shareholder returns through dividends and share buybacks.

The bank's strategists point to Europe's recent performance as stronger than its reputation suggests, with companies in the STOXX 600 expected to report aggregate earnings growth of 23.4%. This is based on reported results from 268 companies and estimates for those yet to publish results.