Goldman Sachs has revised upward its dividend outlook for the Euro Stoxx 50 index, now targeting 194.7 for 2027 and 218.3 for 2028. Those figures are roughly 6 index points higher than the bank's projections from May, reflecting stronger dividend outcomes and earnings momentum since that prior outlook.
The investment bank highlighted that dividends have generally held up well in most regions since May. European and Japanese dividend payments have kept pace with their broader equity markets, while S&P 500 dividends have lagged relative to the U.S. equity index. That lag in U.S. dividends has reduced implied dividend yields when compared with other regions, a pattern Goldman Sachs links to continued leadership in technology stocks and related earnings revisions - sectors that on average distribute lower cash dividends.
Earnings expectations have moved higher across a majority of major markets, with the United States and North Asia leading those upward trends. Goldman Sachs points to strong earnings growth among firms positioned to benefit from artificial intelligence capital expenditure, particularly semiconductor companies, as a key force behind the revisions. Reflecting that environment, the bank's equity strategy team has raised its fiscal 2026 earnings-per-share growth forecast for Europe to 15% from a prior 10%.
Within Europe, the earnings upgrades have been concentrated in the energy, basic materials, technology and financials sectors. By contrast, cyclical consumer sectors have continued to lag in the revision cycle. Goldman Sachs notes that this sector composition - with heavier weights in groups seeing positive earnings revisions - has helped underpin dividend prospects for both the Euro Stoxx 50 and the FTSE 100.
The Euro Stoxx 50 will experience a scheduled rebalancing this month. Engie and Nokia will join the index, replacing Volkswagen and Wolters Kluwer. Goldman Sachs estimates those changes will create about a 1 index point drag per year relative to their prior forecasts. Separately, the Stoxx 600 Banks index is set to add four new constituents without any exits.
Goldman Sachs also observed that dividend risk premia have compressed and now appear low relative to historical norms and to credit spreads. The bank ascribes this compression in part to favorable supply-and-demand dynamics for dividends and to the positive earnings revisions recorded over the past 12 months.
On measures of sensitivity, the beta of 1-year forward Euro Stoxx 50 dividends has rebounded from lower levels seen earlier in 2026, while betas for longer-dated dividend horizons have remained broadly stable.
Market tickers referenced in this report:
- US500
- STOXX50
- VOWG
- ENGIE
- NOKIA
- WLSNc