European equities are splitting hard between index-level caution and select sector bullishness, according to research published this week.
On the bearish side, one camp of analysts warns that euro area valuations — especially in software and AI-linked names — look stretched, with sentiment at one of its most negative readings in years and markets vulnerable if energy and AI uncertainty drags on. A separate published view argues rising input costs (energy, raw materials, logistics) will squeeze manufacturer margins without matching demand, weighing on broad indices over coming months. Both see the Euro Stoxx 50 under pressure.
The bullish thread runs through sectors. Researchers covering recent industry conferences argue European defence has structural demand tailwinds and improving order books over a 6–12 month horizon. German automakers, they note, are sitting on hefty domestic backlogs and steady US demand despite China headwinds. A contrarian technical read on the DAX argues the index holds up as long as 23,000 support does.
On single names, the published consensus on one European equity is notably strong: 77% buy ratings and an average 12-month target near €12.