Investing.com — Deutsche Bank has raised its FY26 earnings growth forecast for the to 12% from 9%, citing stronger energy earnings and resilient growth outside the sector, as the bank noted H1 aggregate earnings are expected to increase by 10% year-over-year.
Deutsche Bank strategists, led by Francesca Mazzali, said this marks “a strong acceleration from the 4% yoy growth rate seen in H2,” with the Energy sector doing much of the heavy lifting, contributing 7 percentage points to the year-over-year growth.
Excluding Energy, consensus expects H1 earnings to increase by just 3% year-over-year.
However, Mazzali wrote that Deutsche Bank remains “more optimistic than consensus on ex-Energy earnings,” pointing to a global macro environment that “has been more resilient than feared,” with UK economic growth surprising to the upside and global PMIs remaining in expansionary territory.
The bank forecasts H1 ex-Energy earnings growth of 5% year-over-year, implying a 2% beat versus consensus.
Basic Materials is also seen to stand out as a positive contributor, expected to lift H1 growth by almost 4 percentage points, while Deutsche Bank noted consensus expects Financials and Staples to be the biggest drags on growth.
Since the start of the Iran war, Deutsche Bank said FY26 estimates have been revised up by 7%, mostly driven by Energy and Basic Materials, with consensus now expecting FTSE 100 earnings to grow 14% this year.
The bank remains “slightly more cautious than consensus on overall FY26 growth” but “slightly more positive on the ex-Energy side.”
On UK politics, the strategists said they will monitor reforms under new Prime Minister Andy Burnham, though they expect “limited impact to consensus earnings estimates for the FTSE 100.”