European Earnings Season: Q2 preview: strong growth expectations, muted beat potential

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European Earnings Season: Q2 preview: strong growth expectations, muted beat potential

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European Earnings Season

Q2 preview: strong growth expectations, muted beat potential

Consensus expects 11% year-on-year EPS growth in Q2, but EPS beats are likely to be weak: the 09 July 2026

European earnings season is about to start, with over half of companies reporting by the end of July. Sell-side

Equity Strategyconsensus expects Stoxx 600 EPS growth of 11% year-on-year in Q2, up from 9% in Q1, which, if realised,

Europe

would be the strongest pace since Q4’22. Earnings growth expectations are primarily driven by the energy

sector (a 8.5ppt contribution) given the oil spike in Q2. Stronger demand is also helping, with Q2 sales growth Paulina Strzelinska >>

forecasted at 6% year-on-year (vs 0% in Q1), which would be the highest since Q4’22 (7% and 2% ex-energy, Quant Strategist

MLI (UK)

respectively). Despite robust headline growth, EPS beats are likely to be subdued: deeply negative Euro area +44 20 7996 7059

economic surprises imply a beat ratio of 47%, down from 52% in Q1 and well below the 55% long-run average. paulina.strzelinska@bofa.com

Q2 EPS estimates have risen by 1% over the past two months, led by a 5% upgrade in resources, while Andreas Bruckner >>

Investment Strategist

cyclicals have seen a 1% increase and defensives a 2% decline. MLI (UK)

+44 20 7996 1306

Cyclicals’ earnings recovery continues, while financials’ growth is set to slow: Q2 EPS for cyclicals is andreas.bruckner@bofa.com

expected to grow by 8% year-on-year, turning meaningfully positive after four quarters of weakness, despite a Sebastian Raedler >>

continued drag from consumer discretionary (-6% year-on-year). While negative Euro area economic surprises MLI (UK)