Goldman Sachs Lowers 12-Month Expectations for STOXX 600

Goldman Sachs has revised down its 12-month forecast for Europe’s STOXX 600 index, citing weaker economic growth, higher tariffs, and global trade challenges.

Key Forecast Adjustments

Revised STOXX 600 Price Targets:

• 3-Month: 510 (down from 560) = -6% return
• 6-Month: 530 (down from 570) = -2% return
• 12-Month: 570 (down from 580) = 5% return

Earnings Growth Outlook:

• 2025 EPS Growth: 2% (previously 4%)
• 2026 EPS Growth: 4% (previously 6%)
• Now below consensus estimates of 6% (2025) and 11% (2026)

Consensus estimates for 2025 EPS growth have dropped from 8% earlier this year, reflecting a broader downward trend.

What Led to the Downgrade?

Rising Trade War Concerns

• US to impose a 15% reciprocal tariff on all trading partners (previously expected at 10%).
• EU factors into ~15% of US imports and will incur costs from machinery, pharmaceuticals, and chemicals.

Weakening Global Growth

• Goldman Sachs has lowered US Q4 2025 GDP forecast to 1% (from 1.5%).
• Tariffs might slow European growth, affecting corporate profits.

Monitoring STOXX 600 and Market Risks

Track Market Trends with Key APIs:

• Sector P/E Ratio API: Assess how valuation shifts impact key sectors in Europe like manufacturing, pharma, and chemicals.
• Earnings Historical API: Track earning trends in Europe and compare them with the market expectations.

What’s Next for European Markets?

Will European stocks recover, or are further declines on the horizon?

How will tariff escalations impact earnings into 2025?

Will Europe’s central banks intervene to combat economic headwinds?