HSBC Bets on Mid-Cap Companies and Raises European Equity Forecasts

HSBC has raised its year-end 2026 target for the STOXX 600 index to 680 points—up from 670—and set a 2027 target of 760 points, driven by improved earnings growth outlooks and equity re-ratings.

The bank also anticipates a shift in earnings growth leadership toward mid-cap companies; earnings per share for the FTSE 250 are projected to grow by 14% in 2027, compared to 5% for the FTSE 100, as these firms benefit from the improving UK economy.

HSBC noted that domestic revenues for European companies have reached 51.2%, though currency factors remain significant, given that approximately 49% of revenues are still derived from overseas markets.