European stocks "strongest bull market" born! Credit Suisse raised the target of Stoxx 600 index to 690 points in a big way.

UBS Group strategists said that stronger profits and broader gains will drive European stocks to new highs this year. These strategists have now become the most bullish forecasters tracked by Bloomberg. UBS strategists Jerry Fowler and Sutanya Chedda raised their year-end target for the Stoxx Europe 600 Index from 630 points to 690 points, implying about an 8% upside from current levels. Their new forecast surpasses the previous highest prediction of 680 points set last month by JPMorgan's Mislav Matejka. The UBS team believes this upward trend will extend to 2027, with a target set at 760 points, meaning a 19% increase over the next 18 months. UBS strategists believe there is further upside potential for the European stock market. The strategists wrote, "It's time to dial down the caution," "We are raising our target on the Stoxx 600 as earnings resilience is stronger and better than expected." For the team, three things have changed: upgrades related to artificial intelligence are stronger, bank stocks continue to receive positive earnings revisions, and large defensive sectors are no longer dragging the index lower, driven in part by a weaker euro. They believe these changes are enough to support over 10% earnings growth and higher valuations. European stocks have rebounded from the decline caused by tensions with Iran, and recent geopolitical tensions are not enough to derail this upward trend. Economic indicators are mixed, but analysts have been consistently raising earnings expectations ahead of the second-quarter earnings season. They expect profit growth of around 12% for this quarter. The rise in European stocks is mainly driven by profit growth. According to Fowler and Chedda, the earnings season will further strengthen the growth momentum and should confirm that Europe's economic conditions are better than currently portrayed in economic commentary. They said, "We expect investors to focus on three questions: whether AI-related upgrades continue, whether bank stocks are still driving positive earnings revisions, and whether defensive sectors are finally stabilizing," "These answers should support an improvement in market sentiment in the near term."