Europe Weekly Kickstart

Latest edition · September 4, 2026

Europe Weekly Kickstart Back to School Constructive, but Selective

Goldman Sachs maintains a constructive yet selective outlook on European equities, supported by an upgraded 2026 STOXX Europe EPS growth forecast of 15% and attractive FCF yields vs. the US. However, elevated bond yields, European gas supply risks, and French fiscal uncertainty require selective positioning favoring German equities, Renewables, Technology, Banks, and Defense.

Goldman Sachs Research highlights that European equities have performed solidly in 2026, underpinned by robust earnings momentum leading to an upgraded 2026 STOXX 600 EPS forecast of 15%. Europe provides diversification and valuation support at 14.6x P/E alongside a superior FCF yield (5.3% vs. 3.6% for the S&P 500). Nevertheless, macro hurdles persist: sovereign yield convergence is eroding equity yield advantages, gas markets remain exposed to Persian Gulf and LNG supply shocks, and French sovereign spreads (OAT-Bund at ~85bp) create domestic equity risk. The strategists advise a balanced Cyclical/Defensive posture, tilting towards Germany over France, Overweighting Technology, Banks, Defense, Telecoms, and Renewables, while remaining Underweight Autos, Chemicals, Travel & Leisure, and Healthcare.

Key takeaways from the latest edition

• 1.Goldman Sachs recently raised its 2026 STOXX Europe EPS growth forecast to 15%, citing broad-based earnings momentum, before normalizing to mid-single digits in 2027.
• 2.European equities continue to offer valuation appeal and cash generation, trading at 14.6x forward P/E with an NTM FCF yield of 5.3% versus 3.6% for the S&P 500.
• 3.Three primary risks weigh on Europe: higher bond yields limiting multiple expansion, vulnerability to energy/gas supply shocks, and political/fiscal strain in France as the OAT-Bund spread widened to ~85bp.

What this series covers

• Back to School: Constructive, but Selective
• 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

Edition archive

• Europe Weekly Kickstart Back to School Constructive, but Selective

  September 4, 2026

• Europe Weekly Kickstart Data only update

  August 7, 2026

• Europe Weekly Kickstart 1H 2Q26 Earnings Tracker Early Beats Remain Concentrated

  July 24, 2026

• Europe Weekly Kickstart

  July 3, 2026

• Europe Weekly Kickstart Higher yields hit equities, but the pain is shifting

  May 24, 2026

• Europe Weekly Kickstart Earnings Hold Up

  May 10, 2026