Are Eurozone earnings expectations really too high?

Analysts question the headline 18% 2026 EPS growth projection for the Eurozone, arguing it is skewed by extreme base effects in the Consumer Discretionary sector. J.P. Morgan points out the median MSCI Eurozone EPS growth forecast is a more modest 8%, implying room for upside surprises rather than an outright bubble. Outside Discretionary, sector forecasts are largely single-digit, with energy and semiconductors showing the biggest revisions higher. Near-term momentum is muted: Q1 2026 EPS is seen rising about 3% YoY while sales are flat. Valuations make Europe relatively attractive (2026 forward P/E ~15.9 vs S&P 500’s 22.4 and a 3.1% dividend yield), and J.P. Morgan’s 385 year-end target for MSCI Eurozone implies modest upside from mid-April levels.