Morgan Stanley raised its European equities target in a note Tuesday, seeing a potential 17% return for the whole year.
The bank states it has a rising conviction in its bullish view. It sees a potential 12% upside from current levels.
"With AI diffusion coming through strongly in earnings season and our house view that this is the 'Year of AI Adopters,' we weight up the AI portion of our model," explained Morgan Stanley analysts.
"Likewise, we weight up M&A as it continues to pick up from cycle lows. More broadly, we have growing conviction in our soft landing playbook," they added.
The bank now has a year-end price target for MSCI Europe of 2230. The firm maintained its earnings growth expectation of 6% for 2024 for MSCI Europe.