Eurozone Equities

UBS maintains a Neutral rating on Eurozone equities despite an improving earnings outlook, citing geopolitical risks to energy flows. They project a 25% earnings recovery over two years, driven by AI, electrification, and cyclical improvements.

Key Takeaways

• 1.Eurozone equities are supported by an improving earnings outlook and reasonable valuations, with UBS forecasting 25% earnings growth over the next two years.
• 2.UBS has raised its 2026 earnings growth forecast for the Euro Stoxx 50 to 8% (up from 5%) due to strength in AI, electrification, and commodity earnings.
• 3.Despite the upside, the region is rated as Neutral due to geopolitical risks affecting energy flows, particularly regarding Iran.

Table of Contents

• Central scenario
• CIO themes
• Preferences
• Upside scenario
• Downside scenario
• Global asset class preferences definitions
• Appendix
• Risk information

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