Goldman Sachs Europe Weekly Kickstart: 1Q26 Earnings Tracker - Raising 2026 Earnings Targets on Commodities Upgrades

Goldman Sachs has raised its 2026 earnings targets for European equities, primarily driven by substantial upward revisions in the commodities sector. According to the latest Weekly Kickstart report tracking 1Q26 results, commodities-sector upgrades have catalyzed a broader improvement in the regional profit outlook. Specifically, the firm now projects 2026 EPS growth for the European market at 7%, up from a prior estimate of 5%.

This aggregate upward adjustment is largely attributable to the commodities sector, where the 2026 earnings growth forecast was increased from 3% to 8%, reflecting sustained strength in global energy and metals pricing. Furthermore, early 1Q26 reporting season data reveals that 60% of disclosing companies have beaten earnings expectations, predominantly led by robust outperformance in the energy and materials industries. Conversely, technology and healthcare sectors are experiencing moderating earnings growth, while commodities and financials demonstrate pronounced strength.

Goldman Sachs notes that the European earnings revision ratio has improved from 0.8 to 1.2, signaling enhanced analyst confidence. Supporting metrics include a 12-month forward PE ratio of 14 times—below the historical average of 15 times—and net inflows of USD 20 billion into European equity funds over the past week. Additionally, corporate buyback activity has reached EUR 50 billion year-to-date, representing a 15% year-over-year increase. The firm anticipates the European Central Bank will implement a 25 basis point rate cut by September 2026, which should further bolster economic recovery and support equity valuations. Geopolitical risks and global trade frictions remain notable downside variables requiring ongoing monitoring.

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