Second-quarter European earnings are set for double-digit growth on the same period last year, but gains will be led by one sector in particular, according to analysts at Deutsche Bank. In a note published on Monday, Deutsche analysts highlighted consensus expectations of 12% earnings growth year-on-year for the quarter, following “comparably resilient economic data” from the euro zone amid geopolitical turmoil. And the analysts expect growth to exceed expectations for the period. @LCO.1 YTD line Oil prices soared in the wake of the Iran war, lifting earnings in the energy sector “On the back of strong positive revisions into the earnings season, we forecast small but positive beats and see 14% earnings growth this quarter,” they wrote. However, Deutsche said growth is set to be overwhelmingly driven by the energy sector, where earnings are expected to have rocketed 84% year-on-year. It comes after the economic fallout of the Iran war and the closure of the strategically vital Strait of Hormuz pushed Brent crude prices to an average of $97 per barrel during the second quarter, a 45% increase on the same time last year. Brent prices traded closer to $73 per barrel on Monday, amid the ongoing ceasefire and hopes of lasting peace between the U.S. and Iran. Without energy, European earnings are set for growth closer to just 3% year-on-year, according to Deutsche. “Outside energy, chemicals and industrials are expected to post strong growth,” the bank said. “Earnings growth in banks is projected to continue decelerating to mid-single digits before a recovery is expected in H2.” “Health care is likely to post a third consecutive quarter of declining earnings, while autos are projected to see the first quarter of positive earnings growth since 2023.”
