Philipp Lisibach, Head of Investment Strategy & Themes, LGT Private Banking:

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Equity valuations are historically high, largely driven by the U.S. market. Earnings growth remains strong: The S&P 500 is expected to deliver 15 percent earnings-per-share growth in 2026, after 11 percent this year.

The key question is whether these expectations are realistic. The IT sector accounts for roughly one-third of the U.S. equity market, with earnings forecasts of 23 percent for 2025 and 28 percent for 2026. A major driver is the semiconductor sector, benefiting from AI-related investment. Demand for computing power keeps infrastructure providers operating at full capacity – supporting continued earnings growth.

«We therefore expect U.S. equities to continue rising, albeit at a somewhat slower pace than in recent years.»

Looser regulation, along with more favorable depreciation rules for investment and R&D, should further support corporate profits.

We therefore expect U.S. equities to continue rising, albeit at a somewhat slower pace than in recent years. Valuations in Europe are far lower, yet the region continues to suffer from weak growth – weighed down by U.S. tariffs, a weaker dollar, softer Chinese demand and a less attractive sector mix.

For 2025, EPS growth of 11 percent is expected, mainly driven by rebounds in sectors such as autos and luxury goods. These forecasts may prove too optimistic.

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