Bond.az reports that Goldman Sachs has raised its 12-month target for the STOXX 600 index to 660, citing resilient corporate earnings growth despite Middle East tensions.
The pan-European benchmark rose 2.5% in May but remains capped by geopolitical risks. The new target implies a 5.4% upside from the last close of 626.
The brokerage also lifted its 3-month and 6-month targets to 640 and 645, respectively. Solid nominal growth, positive revisions in energy, and resilient margins underpinned the rally, along with AI optimism.
However, inflation and high interest rates limit valuations. The STOXX 600's forward P/E of 17.55 is cheaper than the S&P 500's 27.94.
Goldman sees EPS growth of 10% in 2026 and 5% in 2027. International investors allocate to Europe for value and diversification, while domestic investors remain cautious.
