The Case for Europe – Earnings and Multiple Convergence

### **MFS Equity Insight – April 2025: Re-Evaluating Europe’s Role in Global Portfolios**

MFS’s Strategy and Insights Group highlights growing opportunities in European equities, driven by earnings convergence, shifting fiscal dynamics, and undervalued valuations relative to U.S. markets.

Key Insights:

• Earnings Alignment: European earnings are beginning to match U.S. growth outside of the Magnificent Seven.
• Valuation Gap: European equities remain significantly undervalued, with room for multiple expansion.
• Fiscal Tailwinds: Europe benefits from rising investment and looser fiscal policy, while the U.S. faces contraction and tariff-related headwinds.
   

Examine the full report and explore the case for a European equity resurgence.