One might consider it a success that the U.S. and Iran have managed to sit down at the negotiating table at all. At present, however, a quick agreement does not appear likely, even though neither side really has any interest in prolonging the conflict. As a result, geopolitical uncertainty remains high and the Strait of Hormuz remains closed. Even if the strait were to reopen soon, we still expect it to take quite some time for production and supply capacities to return to pre-crisis levels. An average oil price for 2026 could thus hover around USD 100.
One might expect markets to increasingly come to terms with the realization that the price effects of higher energy costs can no longer be classified as purely transitory, but are likely to have a lasting impact, at least through 2026. Second-round effects, as well as persistently higher interest rates, should therefore be viewed more closely as relevant factors for equity markets as well.
Sentiment indicators, such as the European Sentiment Indicator, have recently turned visibly downward, and expectations regarding economic growth have not remained unaffected by this – the German government has just halved its forecast for German GDP growth in 2026 to 0.5%.
In contrast, the consensus for corporate estimates has so far remained largely unaffected by the current situation, and this holds true for virtually all global regions. EPS (earnings per share) trends continue to show an upward trajectory over the long term. While a certain flattening of trends can be observed across all forecast periods from 2026 to 2028 for CEE, a differential between the years remains intact and continues to imply solid annual earnings growth.
The same applies to EPS trends across CEE sectors. In relative terms, cyclical stocks have gained significant momentum in consensus estimates, both for fiscal year 2026 and for 2027.
This may be cause for some concern that, should the conflict end, investors might miss out on a sudden shift into cyclical sectors. Until then, however, a European valuation advantage is no longer truly tangible, and current valuations place significant demands on expected earnings trends actually materializing.
Author:
Henning Eßkuchen
Head of CEE Equity Research, Erste Group Bank AG
4 May 2026
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Note
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.