Goldman, JPMorgan Say Europe Stocks Are Attractive Into Year End

Goldman Sachs and JPMorgan strategists anticipate European equities will deliver gains into year-end, driven by an improving economic outlook. Goldman Sachs specifically forecasts the Stoxx Europe 600 Index to rise 2% to 560 points by the end of 2025, citing improving growth prospects, low investor positioning, and relatively cheaper valuations as key catalysts.

Analysis

Prominent Wall Street strategists at Goldman Sachs and JPMorgan are signaling a bullish outlook for European equities, anticipating gains in the coming months and through 2025. Goldman Sachs has issued a specific forecast for the Stoxx Europe 600 Index, targeting a 2% increase to the 560 level by the end of 2025. This positive sentiment is underpinned by three key factors: an improving economic growth outlook for the region, current low investor positioning which suggests significant capacity for capital inflows, and the relative valuation attractiveness of European stocks. The expectation is that these catalysts will enable the market to break out of its recent narrow trading range, presenting a tactical opportunity.

Key Decisions for Investors

• Investors with under-exposure to European markets may consider increasing their allocation to capitalize on the bullish calls from Goldman Sachs and JPMorgan, especially given the low current investor positioning.
• The relatively attractive valuation of the Stoxx Europe 600 presents a potential entry point for value-oriented investors seeking diversification from more expensive global markets.
• Monitor incoming European economic growth data and fund flow reports, as confirmation of improving fundamentals and increasing investor allocation will be key to validating this bullish thesis.
• The Goldman Sachs forecast for a modest 2% gain by the end of 2025 suggests that while the outlook is positive, investors should manage return expectations and focus on tactical accumulation rather than anticipating a major bull run.