UBS said it expects the upcoming third-quarter earnings season to show further improvement in European corporate profits, maintaining an upbeat view on the region's equities despite higher interest rates and energy prices. Matthew Gilman, head of European equity strategy at UBS Global Wealth Management's Chief Investment Office, said revenues are becoming a more important earnings driver alongside already well-established cost discipline, with currency effects shifting from a headwind to a tailwind. UBS forecasts 15% earnings growth in both 2026 and 2027 for the eurozone, citing September's strong global manufacturing PMIs and the German ifo survey as evidence of robust underlying demand. Gilman said investment in AI still appears more supply-constrained than financing-constrained, and that high energy prices reinforce the case for electrification and defense investment. UBS kept the eurozone at Attractive and favors IT, industrials, banks, Germany and health care within the region, while recommending a selective approach to consumer discretionary through its Luxury & Lifestyles theme.
UBS Group AGUBS's CIO maintains an upbeat Attractive view on eurozone equities and forecasts 15% earnings growth, a bullish house call from the firm itself
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