NicoElNino
Citi Research analysts raised the Stoxx 600 Index (STOXX) year-end target to 540, from 510, according to a Citi Research Macro Think Tank report.
European earnings per share growth is estimated now at 6%, compared to 3%.
“Our year-end target assumes no further multiple expansion from current levels, which could still be too conservative,” said Analyst Beata Manthey.
This update is driven by a greater certainty on rate cuts — which Citi analysts believe will happen during the first two weeks of June — year-to-date global growth upgrades, and a likely weaker dollar.
Analysts said micro risks are still skewed to upside and remain skeptical of a rotation from growth to value styles.
A broader cyclical outperformance looks more plausible, analysts said and added that their preferred broadening trade is European small and mid-caps (IEUS).
