Most years, market analysts tend to start with optimistic earnings forecasts then quietly trim them as reality sets in over the following months. The pattern is remarkably consistent. Initial estimates are revised lower through the year as actual results, guidance and macro data come in below the rosier early assumptions. It’s become such a reliable feature of the European earnings cycle that investors often build the expected downgrade into their own forecasts from day one.

But as this month’s chart shows, this year has seen a bullish departure from that pattern. In a very positive signal, rather than the customary drift lower, consensus earnings estimates have actually been revised upward since the start of the year. A market where earnings are being upgraded rather than cut removes one of the headwinds that has weighed on European equity sentiment in recent cycles.

It’s true that a significant portion of the upgrade is coming from the energy sector. But we’re also seeing forecasts improve across a range of other sectors including capital goods, utilities, semiconductors and banks, suggesting that the upgrade cycle has real breadth behind it. Indeed, fiscal stimulus, the AI buildout and resilient credit conditions are providing medium-term tailwinds that could help to drive growth in 2026 and the years ahead.