UBS Lowers Eurozone Corporate Profit Growth Forecast for 2025

UBS Global Wealth Management has reduced its forecast for corporate earnings growth in the euro zone to 3% in 2025, citing weak second-quarter results and negative currency effects. The bank expects earnings to recover with a 5% growth in 2026 and a faster acceleration in 2027, driven by improving commercial dynamics and political clarity. UBS maintains its "neutral" recommendation for euro zone stocks.

Title: UBS Adjusts Euro Zone Corporate Earnings Outlook for 2025

UBS Global Wealth Management has revised its forecast for euro zone corporate earnings growth in 2025, projecting a 3% contraction, citing weak second-quarter results and adverse currency impacts. The bank had previously anticipated flat growth for the year. However, UBS expects earnings to rebound with a 5% growth in 2026 and a faster acceleration in 2027, driven by improving trade dynamics and policy clarity. The bank maintains a 'neutral' stance on euro zone equities [1].

The revised outlook reflects a challenging environment for euro zone corporate earnings, with UBS attributing the slowdown to poor second-quarter performance and unfavorable currency conditions. Despite these headwinds, the bank remains optimistic about the future, predicting a recovery in earnings growth in the subsequent years. This optimism is grounded in the anticipation of improving trade conditions and greater policy clarity, which are expected to bolster corporate earnings.

UBS's neutral stance on euro zone stocks indicates a cautious approach, acknowledging the current economic challenges while also recognizing the potential for future growth. The bank's strategic move to invest in Domino Data Lab further underscores its commitment to leveraging technology for innovation and competitive advantage in the financial services sector [2].

References:
[1] https://www.marketscreener.com/news/ubs-slashes-euro-zone-corporate-earnings-outlook-for-2025-ce7c50dadf8af627
[2] https://www.ainvest.com/news/ubs-group-expands-data-science-domino-data-lab-investment-2508/