Author Lucy Raitano
London (Reuters) – European companies were supposed to provide third growth growth, which could help maintain new investors’ enthusiasm for the region, despite political and economic turmoil and concern about the threat of US President Donald Trump.
European shares trade in record altitudes and surpassed Wall Street in the introductory weeks of 2025, but the estimates are still compared to.
Cash investor has entered the European market with the second fastest pace in January 25, according to the Bank of America, even before Trump has taken over the Presidency and has started to extinguish the first earnings of the European company.
Analysts are cautious, after they have seized their estimates to grow earnings in the fourth quarter at 1.5% compared to the previous year – or 4.9%, excluding energy – with estimated 2.5% just two weeks ago, according to LSEG data I/b/e/e/e/s.
This would still mark the third consecutive quarter of expansion with forecasts that show and the growth of profit and sales for the first time since the first quarter of 2023.
“There is a high likelihood that if companies exceed expectations during the reporting season, shares can increase. The potential for upside down is higher than the lack,” said Matthieu Dulguerov, head of the section in Reyl Intes Sanpaolo (OTC :).
However, with Trump threatened to impose tariffs to import European Union, and political and economic insecurity by abolishing the engine for growth of the Euro Zone – France and Germany – the mood is tense.
“We think that European managerial teams will make a mistake on the alert and give wide range given the uncertainty and the previous difficult years in Europe,” said Bernie Ahkong, CIO Global Multi-Strategy Alpha on UBS O’Connor. He quoted the uncertainty over the new American administration, the Chinese economy, the key market of European exporters and geopolitics.
Luxury Bellwether LVMH reports on Tuesday, Dutch manufacturer of equipment for ASML computer chips (as 🙂 on Wednesday, and Deutsche Bank (Etr 🙂 The next day. Danish drug manufacturer Novo Nordisk (NYSE 🙂 reports a week later.
Lower bar, lighter beats
Early days for profit, but already, Swiss luxury giant Richlanica (Six Six 🙂 recorded their biggest daily increase in 16 years on January 16th after sales broke their expectations in the fourth quarter.
The latest business activities show that the three largest economies of the Euro zone – Germany, France and Italy – are stuck in an industrial recession, lagging in global research, which has encouraged a strong US economy, thus alleviating European earnings.
Another factor given to European stakeholders by a tail wind is the euro, which has lost about 4.5%in the last year.
“Many believe that Europe is facing economic challenges and will have lower growth than the United States, however, most European companies do not rely on European economic growth because they operate globally,” Dulguer’s said.
Goldman Sachs strategies estimate that 60% of European companies are coming outside Europe.
European shares trade close to the highest discount on the record, forward ratio of the price and earnings of about 13.3, compared to 21.6 for US shares, LSEG Datastream states.
Many of these factors have already been infused with the assumptions of the investor, and for Ahkong, the comment on the year -round guidelines will be crucial for his team, which stared strongly at certain sectors.
Investors will surpass the announcements of the company for any clarity about the impact of Trump’s policies on the results.
On Monday, Lances (ETR 🙂 The shares jumped 5.1% after the German special chemical manufacturer said that his basic earnings in the fourth quarter exceeded market expectations by more than 20%, mostly because of the purchase of US customers ahead of Trump’s inaugural, January 20 , Given his threats to tariffs.
