Goldman Sachs Raises Euro Stoxx 50 Dividend Forecasts for 2027-28

Goldman Sachs has increased its dividend projections for the Euro Stoxx 50 index for 2027 and 2028. The bank cites earnings growth across key European sectors that offsets the anticipated drag from upcoming index rebalancing.

Following a review of regional market performance, the bank lifted its dividend forecast for 2027 to 194.7 points and for 2028 to 218.3 points. These figures represent an upward revision of approximately 6 index points compared to the estimates provided by Goldman Sachs in May.

Earnings Growth Drivers

The improved outlook is underpinned by an increase in the firm's earnings-per-share growth forecast for Europe. Goldman Sachs now expects 15% growth for 2026, a rise from its previous projection of 10%. This momentum is concentrated in several sectors:

• Energy
• Basic Materials
• Technology
• Financials

Impact of Index Rebalancing

This revision arrives despite a structural adjustment to the Euro Stoxx 50. The index will undergo a rebalancing this month, which will see the removal of Volkswagen and Wolters Kluwer. They will be replaced by Engie and Nokia.

According to a report from Investing.com, this composition shift is expected to create a drag of approximately 1 index point per year on the total dividend payout. The index rebalancing mechanism is designed to ensure the benchmark remains representative of the current market capitalization and liquidity of the eurozone's largest companies, though such changes often introduce volatility to dividend yield expectations.

What This Means for European Markets

The revision suggests that analysts at Goldman Sachs view the underlying profitability of major European firms as strong enough to absorb the mechanical dilution caused by the index changes. For market participants, these forecasts serve as a gauge for shareholder return potential within the Euro Stoxx 50, which remains a primary barometer for equity performance in the eurozone. The concentration of growth in sectors like technology and financials reflects a trend of margin expansion in these industries, which are prioritized in institutional dividend models.