http://www.bloomberg.com/news/2014-09-11/europe-earnings-bulls-beat-bears-first-time-since-2012.html
In the tug-of-war between investor optimism and analyst skepticism in Europe, the advantage is going to the equity bulls.
Analysts who raised profit estimates for European companies exceeded those cutting them this month for the first time since April 2012, a sign of optimism after corporate income fell in two of the last three years. A revision index compiled weekly by Citigroup Inc. turned positive on Sept. 5 after the European Central Bank unexpectedly cut interest rates and announced a plan to buy securities.
“It’s good to finally see revisions improve as analysts feed the lower euro into their forecast models,” said Lars Kreckel, a London-based global equity strategist at Legal & General Investment Management. “With the ECB becoming more proactive, it seems everything is coming into place for a positive story.”
The Euro Stoxx 50 Index rallied 60 percent in the two years through June and its valuation increased to the most expensive on record in July. Gains outran profits as earnings fell 8 percent last year, rose 1 percent in 2012 and declined 11 percent in 2011, according to data compiled by Bloomberg.
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