The analysts pointed to signs of a pick-up in the Eurozone growth, which received a good jolt from the ECB’s loose monetary policies, as a main driver in earnings strength across smaller companies that focus on the domestic economy.
“Since the financial crisis of 2009, earnings from euro zone corporates have lagged far behind those of their U.S. counterparts, which have already surpassed their previous peaks,” James Sym, a member of the pan-European equity team at Schroders, said in a note. “We see this as an opportunity for European investors as euro zone earnings have the potential to stage a strong recovery from their current depressed levels.”
Market watchers will be waiting on the first-quarter gross domestic product numbers on Wednesday to better gauge the growth – analysts polled by Reuters expect a 0.5% expansion over the previous quarter, compared to the 0.3% quarter-over-quarter growth in the U.K. and 0.2% expansion for the U.S.
Looking ahead, some analysts also anticipate double-digit earnings growth this year as a weaker euro currency, decline in oil prices and lower funding costs help support a continued recovery.
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Max Chen contributed to this article.