Citi sets new mid-2027 Stoxx 600 target, sees earnings driving gains

Citi turned constructive on European equities, lifting its mid-2027 Stoxx 600 target to 700, which implies about 11% upside, while keeping its 2026-end target at 640. The bank’s view is anchored in stronger earnings growth, with Stoxx 600 EPS now seen rising 12% in 2026 and 10% in 2027. Citi also raised its FTSE 100 mid-2027 target to 11,800, implying around 15% upside. The call is bullish overall but tempered by macro risks, including higher energy prices, potential rate hikes, and softer eurozone growth. Citi remains selectively positioned for AI adoption and fiscal stimulus, especially in Germany, while favoring technology, banks, basic resources, healthcare and personal goods. It is more cautious on industrials, travel and leisure, financial services, luxury goods, autos, telecoms and utilities.