Goldman Sachs Downgrades STOXX 600 Forecast Amid Tariff Concerns

Goldman Sachs has once again cut its 12-month forecast for Europe's STOXX 600 index, lowering it to 520 points amid concerns over U.S. tariffs and a strengthening euro affecting corporate earnings. The brokerage also anticipated more downgrades, forecasting a decline in earnings-per-share for European companies.

Goldman Sachs has revised its 12-month projection for Europe's STOXX 600 index once more, now setting it at 520 points. The change comes as U.S. tariffs and a stronger euro pose threats to corporate earnings in Europe, causing concern among investors.

The brokerage pointed to a 5% projected year-over-year decline in STOXX 600 earnings-per-share for Q1, suggesting that the financial markets may already be anticipating further downward revisions. Meanwhile, European Union finance ministers emphasized collective resolve in discussions with Washington, even as they highlighted the increased impact of tariffs on the U.S. economy rather than Europe.

Goldman Sachs predicts a 7% contraction in European EPS for 2025, notably below the consensus growth of 4%. The brokerage also cited the risks posed by a stronger euro and lower energy prices, which could impact energy and basic resources sectors. As a result, the UK's FTSE 100 index forecast was also revised downward to 8,500 points. Citigroup has also adjusted its stance on U.S., Japanese, and emerging market equities.

(With inputs from agencies.)