Published research this week flags a clear underweight call on European equities on a medium-term view.
The core argument from one strand of recently published analysis: Europe is structurally disadvantaged versus the US. It is seen as missing the technology and AI leadership that is driving earnings growth elsewhere — long on regulation, short on innovation, and lacking the large-scale margin expansion story that underpins US equities.
Researchers also argue Europe faces the same global repricing of debt now hitting every market. Rising yields are compressing valuations everywhere, but Europe lacks the offsetting earnings strength and consumer resilience that cushion the US.
The contrast drawn is stark: American corporates are described as benefiting from AI-linked profits and solid top-line growth, while European corporates are seen with weaker earnings momentum and no comparable structural driver to absorb higher borrowing costs.
Not a universal view, but a pointed one worth weighing if you have European exposure.