Reuters: Hot Stocks: STOCKS NEWS EUROPE-UBS eyes Europe firms' profit peak in 3 yrs

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STOCKS NEWS EUROPE-UBS eyes Europe firms' profit peak in 3 yrs Sep 2nd 2013, 15:05 Mon Sep 2, 2013 11:05am EDT European firms could return to peak 2007 profits in three years if earnings grow 8 percent each year, after not rising since 2010, UBS equity strategists write in a note. Average earnings trend growth is 6 percent, they add, highlighting that there is currently an unprecedented profit gap between the United States and European equity markets, and that Europe typically would bridge this gap within six to ten months. "Asking the market to grow at 8 percent for three years, in my view, isn't a big ask," UBS strategist Karen Olney says. Olney adds that though 60 percent of the European market is in sluggish earnings territory, banks - which alone account for 40 percent of the current drag on profits - are starting to repair themselves. Several key sectors, including banking, mining, energy and utilities, are stuck below the 2007 peak and will need to do some of the heavy-lifting to swing profits back up to peak levels, UBS says. Reuters Messaging: richa.naidu.thomsonreuters.com@reuters.net Link this Share this Digg this Email Reprints

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