Deutsche Bank has upgraded its full-year 2026 earnings growth forecast for the FTSE 100 to 12%, up from a previous estimate of 9%.
The revision reflects stronger energy earnings and resilient growth across the broader index, with H1 aggregate earnings expected to climb 10% year-over-year.
Deutsche Bank strategists, led by Francesca Mazzali, said the H1 performance marks “a strong acceleration from the 4% yoy growth rate seen in H2.”
The Energy sector is doing much of the heavy lifting, contributing 7 percentage points to the year-over-year earnings growth recorded in the first half.
Stripping out Energy, consensus forecasts point to a more modest H1 earnings increase of just 3% year-over-year across the index.
Deutsche Bank, however, says it remains “more optimistic than consensus on ex-Energy earnings,” pointing to a global macro backdrop that “has been more resilient than feared.”
UK economic growth has surprised to the upside, and global PMIs have remained in expansionary territory, both factors underpinning the bank’s more constructive outlook.
The bank’s own forecast for H1 ex-Energy earnings growth stands at 5% year-over-year, implying a 2% beat versus current consensus expectations.
Basic Materials is also flagged as a notable positive contributor, expected to add almost 4 percentage points to H1 growth figures.
Financials and Staples, by contrast, are seen by consensus as the biggest drags on overall earnings growth in the first half.
Since the start of the Iran war, FY26 earnings estimates for the FTSE 100 have been revised up by 7%, largely driven by Energy and Basic Materials, with consensus now projecting full-year earnings growth of 14%.
Despite the upgrade, Deutsche Bank says it remains “slightly more cautious than consensus on overall FY26 growth” while staying “slightly more positive on the ex-Energy side.”
On the political front, the strategists noted they will closely monitor reforms being pursued under new Prime Minister Andy Burnham, though they expect “limited impact to consensus earnings estimates for the FTSE 100.”
The upgraded forecast reflects a broader recalibration of expectations for UK equities as commodity-driven sectors continue to outperform earlier projections throughout 2026.