The brokerage also raised its MSCI Eurozone target to 420 and kept an overweight view on euro zone equities, citing stronger earnings, lighter positioning and easing geopolitical pressure.
J.P. Morgan raised its year-end target for Europe’s benchmark STOXX 600 to 680 from 630 and lifted its MSCI Eurozone target to 420 from 385, arguing that stronger corporate earnings and a calmer geopolitical backdrop could extend the region’s rally. The new STOXX 600 target implies about 7% upside from Friday’s close of 635.88. The brokerage said markets have been pressured by the months-long Middle East conflict, which fueled inflation and interest-rate concerns, but that a U.S.-Iran peace deal has helped restore some stability. It said Europe could benefit further if the market continues to unwind the conflict’s impact and if market breadth (a wider participation across stocks) improves in the second half. J.P. Morgan reiterated an overweight stance, expecting euro zone earnings to grow about 20% in 2026 after contracting last year. It also said lower oil prices, softer bond yields, reduced tariffs and stronger Chinese growth could support equities, while light investor positioning leaves room for inflows if sentiment improves. Earlier this month, Barclays also raised its STOXX 600 year-end target and dropped its bearish stance.