With another earnings season in Europe about to kick off, one equity analyst is concerned that European firms won't deliver as much return as was expected at the start of the year.
The dissipation of political risks along with strong growth figures and a pickup in inflation have boosted investors' interest in European stocks — the Euro Stoxx 600 index is up by 7 percent year-to-date. However, some are worried that such interest in European equities has been disproportionately boosted by earnings forecasts that were too positive.
"I need to see more than hope and consensus, which is consistently wrong," Daniel Lacalle, chief economist and investment officer at Tressis Gestión, told CNBC last week. His concerns stem from a belief that investors are using a recovery in Europe to buy stocks but based on a metric that has consistently been downgraded over the last 10 years. He believes that the company forecasts made at the start of the year will prove wrong when the final annual numbers are reported.