Goldman Sachs Lifts STOXX 600 Target Amid Strong Earnings

Goldman Sachs has raised its 12-month target for Europe's STOXX 600 index to 695 points, a significant increase from its previous forecast of 660. This implies about 5.5% upside from current levels.

The Wall Street brokerage attributes this optimistic outlook to strong corporate earnings and resilient economies in Europe. The STOXX 600 is expected to reach one of its strongest earnings seasons in years, with companies reporting aggregate earnings growth of 23.4%, according to LSEG I/B/E/S data.

European equities remain cheaper than US peers, while offering relatively high shareholder returns through dividends and share buybacks, Goldman strategists noted. However, a prolonged energy shock remains a major risk for Europe, where dependence on imported energy has kept investor risk appetite in check.