A JPMorgan strategist has become the top bull on European stocks. What does he recommend buying?

A JPMorgan strategist has raised his growth forecast for European stocks, which have fallen in price amid the war in Iran, according to Bloomberg. His forecast is now the most optimistic among the analysts tracked by the agency.

A team of JPMorgan strategists led by Mislav Matejka raised their year-end target for the Stoxx Europe 600 index from 630 to 680 points, which implies an increase of approximately 7% from the latest closing price. The strategists also revised their target for the Euro Stoxx 50 index from 6,350 to 6,800 points. This is 9% above the current level.

So far, the highest market forecasts have come from Barclays and HSBC; both expect the Stoxx Europe 600 to reach 670 points by the end of the year.

According to JPMorgan’s forecast, the stocks that will lead the rally include the consumer sector, as well as semiconductors, industrials, mining companies, and banks. At the same time, against the backdrop of accelerating economic activity, defensive sectors are unlikely to be in demand, and energy companies may come under additional pressure if oil prices continue to fall, the strategists wrote. They also view companies in the business services sector, software developers, and the media sector with caution.

“Profit growth in the eurozone is accelerating this year after three years of stagnation. If we see market expansion in the second half of the year, Europe could once again become an attractive bet,” according to JPMorgan. The bank expects earnings per share to grow by 18% in 2026 and by 12% in 2027.

The Stoxx Europe 600 has gained 6.6% since the start of the year, while the S&P 500, a broad U.S. market index, has risen 7.4%. In the first two months of 2026, European stocks outperformed U.S. stocks until the war in Iran began. The region’s dependence on energy imports, as well as its focus on energy-intensive industries and direct vulnerability to the situation in the Middle East, acted as a drag during the conflict, Bloomberg notes. Nevertheless, eurozone stocks began to outperform again after a preliminary peace agreement between the U.S. and Iran was reached in mid-June.

Interestingly, Mateyka shifted his outlook on European stocks to bullish in October of last year and maintained that view throughout the Iranian crisis, viewing the resulting decline as a buying opportunity. Earlier this month, the strategist predicted that stocks in the region would outperform their U.S. counterparts in the second half of the year.

Mateyka’s colleague at JPMorgan, Karen Ward, stated last week that, against the backdrop of falling oil prices and strong growth in the artificial intelligence sector in the U.S. and Asian markets, European stocks remain relatively cheap, offering an attractive entry point.

Deutsche Bank also expects a strong earnings season for European companies: corporate profits in the second quarter will rise 14% year-over-year, exceeding the consensus forecast, analysts wrote. However, according to the bank’s estimates, nearly all of this growth will come from the energy sector; excluding it, earnings will increase by only about 3%.

This article was AI-translated and verified by a human editor