Barclays strategists currently predict that European corporate profits will increase by 16% in 2026, compared to the previous forecast of 12%. The reason is that profit growth momentum is expected to increase in the second half of the year. The team led by Magesh Kumar Chandrasekaran and Emmanuel Kao said that the pace at which analysts raised profit expectations is moving closer to the US, and the coverage of profit improvements in various industries is also expanding. “Higher nominal economic growth is still an important benefit for European companies' profits. Oil prices are supporting it, and the exchange rate has also turned into a slightly favorable factor.” However, they also warned that energy prices are still a major uncertain variable, and the risk of stagflation may put pressure on profit estimates.

Barclays strategists currently predict that European corporate profits will increase by 16% in 2026, compared to the previous forecast of 12%. The reason is that profit growth momentum is expected to increase in the second half of the year. The team led by Magesh Kumar Chandrasekaran and Emmanuel Kao said that the pace at which analysts raised profit expectations is moving closer to the US, and the coverage of profit improvements in various industries is also expanding. “Higher nominal economic growth is still an important benefit for European companies' profits. Oil prices are supporting it, and the exchange rate has also turned into a slightly favorable factor.” However, they also warned that energy prices are still a major uncertain variable, and the risk of stagflation may put pressure on profit estimates.