European blue chips stay on course for strongest earnings growth in four years
European blue-chip companies are set for their strongest quarterly earnings growth in four years as third-quarter reporting supports forecasts for broad profit expansion. The outlook is being driven heavily by energy, while analysts also point to AI investment, fiscal spending and consumer trends as support for earnings momentum into 2027.
Highlights
- STOXX 600 companies are expected to post 25% aggregate quarterly earnings growth, with third-quarter revenue seen rising 12% according to LSEG's I/B/E/S data.
- The energy sector drives European blue-chip profits with a projected 151% earnings jump, while excluding energy, earnings growth is now estimated at 10%.
- Siemens rises 1.7% after raising its mid-term outlook and Adecco soars 14.7% on stronger-than-expected profit, as European shares hit a record high.
Earnings forecasts strengthen in third quarter
As reported by Reuters, citing LSEG's I/B/E/S data, companies on Europe's benchmark STOXX 600 index are expected to post aggregate quarterly earnings growth of 25%, based on results from 265 companies and estimates for those yet to report.The energy sector is leading European blue-chip earnings and is expected to deliver a nearly 151% jump in profits. Excluding energy, earnings are expected to grow 10%, up from last week's 9.5% estimate.
Third-quarter revenue is expected to rise 12%, or 7% excluding the energy sector. UBS analysts say in a note on Thursday that Europe's earnings momentum is coming from AI expansion and, more broadly, from fiscal spending and consumer trends, with that trajectory seen continuing in 2027.
Market reaction and companies in focus
European shares hit a record high on Thursday, extending gains supported by a strong third-quarter earnings season, a recent drop in energy prices and a rotation out of AI-linked stocks in Asia and the U.S.Siemens rises 1.7% after the industrial technology group raises its mid-term growth outlook, while staffing group Adecco jumps 14.7% after reporting stronger-than-expected quarterly operating profit.
Next week, investors are watching results from French train manufacturer Alstom, among the nine STOXX 600 companies due to report.
Earlier, we reported on DAX buying momentum as the index held above key moving averages in bullish trade.
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