Europe, UK stocks look cheap in 'show me the money' earnings season, analysts say

U.S. stocks have nearly recouped their losses from the two-day sell-off on the surprise Brexit vote, but investors face another daunting earnings season and may need to look across the Atlantic for growth, analysts told CNBC on Friday.

Britain's vote last week to leave the European Union reinforced the message that low interest rates and weak economic growth are continuing to drive markets, said Simeon Hyman, head of investment strategy at ProShares Advisors.

After the U.K. referendum, European Central Bank President Mario Draghi said the vote could shave up to a half percentage point off euro zone growth over the course of three years.

On Thursday, Bank of England Governor Mark Carney said policymakers would probably need to launch additional monetary stimulus this summer. The announcement sent U.S. and European bond yields to multiyear lows, and bolstered equity markets.

"Low interest rates, they do support the equity markets. You don't need much earnings growth to get a 20 PE with rates that low," Hyman told CNBC's "Squawk Box," referring to the price-earnings ratio, a measure of stock value.

"Unfortunately, the economy is so weak — remember we're in an earnings recession — we haven't had [U.S.] earnings growth in four quarters," he said.

U.S. corporate earnings are estimated to have declined by roughly 5 percent in the second quarter, marking the fifth straight period of contraction, according to FactSet. Analysts expect earnings and revenue growth to return in the third quarter, the financial data firm says.

Hyman said earnings may be "slightly" better this season, but noted the price-to-book on London's FTSE 100 indicates a roughly 35 percent discount to U.S. stocks.

Erik Knutzen, chief investment officer for multi-asset-class portfolios at Neuberger Berman, said his firm is nearly neutral on U.S. stocks at this point and waiting for evidence of earnings growth rather than relying on price-to-earnings expansion.

"We're in a 'show me the money' environment where we actually want to see manifestations of that earnings growth before we're willing to put more money in the U.S. stock markets," he told "Squawk Box."

Neuberger Berman's Global Allocation Fund is currently looking for equity opportunities in Europe, Knutzen said.

He noted that European stocks are trading at 13 times earnings — versus about 17 times earnings for U.S. equities — as the Continent's companies are backed by a "tidal wave" of central bank stimulus.

Further, European corporate profits are still sitting at roughly 2010 levels, he said.

"They haven't seen the same kind of profit recovery that we've seen in the U.S. where we're at kind of secular highs and haven't seen profit growth for the last 12 to 18 months," he said.

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