Europe Weekly Kickstart

European Q1-26 earnings show a strong +9% headline growth driven by Financials and Commodities, but broader market breadth is narrowing. Goldman Sachs warns of a 'margin inflection point' as decelerating GDP growth and rising input costs pose downside risks to future profitability.

Key Takeaways

• 1.European headline earnings growth is robust at +9% y/y for Q1-26, but this strength is highly concentrated in the Financials and Commodities sectors.
• 2.Excluding Financials and Commodities, Q1-26 EPS growth for European companies turns negative to -2% y/y.
• 3.Europe is at a margin inflection point; Goldman's framework suggests net income margins may run 100bp below current consensus expectations due to decelerating growth.

Table of Contents

• Earnings Season Update: Strong Growth, Narrow Breadth
• Beyond Earnings: Europe at a Margin Inflection Point
• How to position?
• Earnings surprises — Equal-weighted
• Earnings surprises — Market cap-weighted
• Sales surprises — Equal-weighted
• Sales surprises — Market cap-weighted
• Snapshot of Global Performance Across Assets - Total Returns (€)
• Global Strategy Views: Indices and Asset Classes
• Earnings Expectations and Revisions
• STOXX Europe 600 Supersectors
• Style Performance
• Thematic Baskets – Price performance
• Sub-Sector Performance
• Thematic Baskets
• Thematic Basket Valuation
• Europe Sector Valuation
• European Indices Valuation
• Long-Term Valuation – Europe
• Flows from Global Investors into European Funds
• Volatility, Skew, Dispersion and Correlations
• Europe Indices Sales Exposure
• European Indices Sector Weights
• Sector Correlations
• Economics

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