The year is drawing to a close, but European equities still have plenty of room to run, according to HSBC.
"We see about 17 to 18 percent upside for continental European equities through the end of this year because we believe that in the next couple of months, maybe even later this month, we might see some further concrete action from Draghi," said Benjamin Pedley, HSBC's head of Asia investment strategy.
The remarks come after European Central Bank (ECB) chief Mario Draghi stressed on Monday that he is willing to do more to stimulate the economy, including purchasing government bonds.
"We've heard it all before to some degree, but we do believe that the next step is sovereign bond purchases, and then potentially a subsequent step could be purchasing corporate debt," Pedley said. "If those events come to fruition, that will be a very significant fillip for European assets."
HSBC isn't alone; JPMorgan and UBS are also bullish on the region.
The U.S. brokerage upgraded the euro zone to overweight from underweight in a note on Monday, with the region "due a period of outperformance versus the United States," Reuters reported.