Goldman Sachs has raised its dividend forecasts for the Euro Stoxx 50 to 194.7 points for 2027 and 218.3 points for 2028, approximately 6 index points above its May estimates. The bank points to broad dividend strength since May, an upgraded European earnings outlook, and a rebalancing of the index this month.
Goldman Sachs raised its dividend forecasts for the Euro Stoxx 50 to 194.7 for 2027 and 218.3 for 2028, approximately 6 index points above its May estimates. The bank says dividends have performed well across most regions since May, with European and Japanese payouts keeping pace with equities.
Tech leadership weighs on S&P 500 payouts
S&P 500 dividends lagged their underlying equity index, pulling implied dividend yields lower relative to other regions. Goldman Sachs attributes this to continued technology-sector leadership in equities and earnings revisions, because tech companies typically pay lower dividends than other sectors.
Earnings upgrades broaden across markets
Earnings expectations have trended higher across most major markets, led by the United States and North Asia. Strong earnings growth from companies tied to artificial-intelligence capital spending, particularly semiconductor firms, drove the increases. As a result, Goldman Sachs' equity strategy team lifted its fiscal-year 2026 earnings-per-share growth forecast for Europe to 15% from 10%.
Within Europe, upgrades concentrated in the energy, basic materials, technology and financials sectors, while cyclical consumer sectors continued to lag; that mix has supported Euro Stoxx 50 and FTSE 100 dividends.
Index rebalancing trims the outlook
The Euro Stoxx 50 will undergo a rebalancing this month, with Engie and Nokia replacing Volkswagen and Wolters Kluwer. Goldman Sachs says the changes will cut approximately 1 index point per year from previous forecasts. Separately, the Stoxx 600 Banks index will add four new entries with no exits.
Dividend risk premia stay compressed
Dividend risk premia have compressed to levels that look low against history and credit spreads, Goldman Sachs said, pointing partly to favorable supply-and-demand dynamics and positive earnings revisions over the past 12 months. The beta of 1-year forward Euro Stoxx 50 dividends has rebounded from lower levels reached earlier in 2026, while betas for longer-dated dividends stayed stable.
Source: Investing.com
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