"The time to buy is approaching": JPMorgan and Goldman expect European equities to rise later in the year

Two of Wall Street's top investment banks are betting that European stocks will rise in the final months of 2025. According to analysts at JPMorgan and Goldman Sachs, an improving economic outlook for the region will help quotes move higher, which means that "the time to buy is near.

Goldman Sachs predicted the Stoxx Europe 600 index to rise by another 2% by the end of 2025 - to about 560 points, Bloomberg reported. According to the investment bank, the European stock market looks relatively inexpensive with low investor participation, and the improving macroeconomic outlook for the region creates the potential for capital inflows and price growth.

Goldman Sachs' team of analysts, led by Sharon Bell, also pointed to "investors' growing desire to diversify and reduce exposure to the U.S. due to both dollar weakness and concentrated positions in the technology sector." Bell expects the benchmark European equity index to rise another 5 percent during 2026, Bloomberg reported.

"The time to buy [European stocks] is approaching," wrote JPMorgan Chase strategist Mislav Matejka, citing the recent recovery in Chinese stocks. China represents a key market for mining and automobile companies in Europe, as well as luxury manufacturers. Matejka believes eurozone stocks could outperform U.S. stocks in the next one to two months, despite another political crisis in France.

The European Stoxx 600 index has gained 8.6% since the beginning of the year. It is slightly behind the main US index S&P 500, which has added 9.8% in 2025.

"The situation in France is not a turning point for a European market rally," said David Kruk, a trader at La Financiere de l'Echiquier. "On the contrary, it may even spur buying on drawdowns," he noted.

BNP Paribas Asset Management portfolio manager and strategist Sophie Yun hopes to see "good entry points" in European stocks. According to her, the regular deterioration in earnings forecasts for European companies since mid-March has paved the way for analysts to start raising them.

European stocks will outperform their New York-traded peers in the next decade, predicted the management of the world's best-performing sovereign wealth fund, the New Zealand-based NZ Super Fund with $44 billion in assets. The European stock market has become the largest position for NZ Super Fund of those in which it has invested more than its standard investment strategy - as part of a tactical allocation of capital to the most promising markets.

Economists at Goldman Sachs and JPMorgan have already made accurate predictions for eurozone stocks in 2025, Bloomberg writes. Bell correctly predicted in May that European stocks are unlikely to repeat the strong results of the first quarter, when they outperformed U.S. stocks in terms of growth. And Matejka predicted a phase of market consolidation (the transition of the stock market from growth to stability) in July and was also right, the agency said.

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