European equities are getting a split read from third-party research right now: constructive on the cyclical and strategic horizons, but with a clear tactical wobble and one notable tail risk.
On the bullish side, the published research consensus points to a 12-month STOXX Europe 600 target around 660, supported by earnings upgrades of 6–7% this year, resilient growth, and strong contributions from energy, financials, mining, and tech. Analysts caution European returns will likely trail the US and Asia given higher energy costs. A separate strategic case argues European defense equities have multi-year upside, driven by government defense budgets potentially topping $500–600 billion, the push for European strategic autonomy as US security guarantees look less certain, and valuations that now look reasonable versus US peers.
The near-term caution: some recently-published views flag weak AI revenue guidance from a major US chipmaker spilling into European semis, with Infineon facing profit-taking and the DAX seen opening around 0.6% lower on Iran-related jitters. A contrarian thread also recommends a maximum underweight on European equities if an oil super-spike tips the global economy into recession, given Europe's heavy energy import reliance.