JPMorgan and UBS forecast broadening Q3 corporate earnings growth

Financial institutions JPMorgan and UBS report positive outlooks for third-quarter corporate earnings in both US and European markets, though they note varying degrees of sector-specific strength and market expectations.

JPMorgan strategists suggest that profit growth is expanding beyond artificial intelligence-related firms to a broader range of sectors. For the S&P 500, earnings per share are expected to increase by 24% to 30%, though growth estimates drop to 15% when excluding major technology players like Nvidia and Micron Technology. In Europe, consensus forecasts for the STOXX 600 indicate 19% earnings growth, though this figure falls to 11% when energy companies are excluded.

UBS notes that European earnings estimates have increased by 4% since July, a reversal of historical downward revisions. While the STOXX 600 is projected to see 23% earnings per share growth, UBS warns that rising forecasts may make it difficult for stocks to achieve significant gains. Sector performance in Europe is expected to be uneven, with energy companies projected to lead with 135% earnings per share growth, while consumer discretionary companies face a projected 5% decline.