Perhaps there is still a good reason for European cyclically adjusted P/E being 30 % below its long term average.
“Aggregate results for European earnings have deteriorated halfway through season – driven by disappointing results this week from Banks sector. 15 out of 24 banks expected have now reported, with an average earnings surprise of -12%, down from +5% last Friday.”
“Stoxx 600 – almost half of companies have reported – average EPS surprise has declined to -2.7%, much weaker than 5-year average (+0.8%). 32% of companies reporting have beaten estimates by more than 5% (well below the average over the past 12 quarters of 43%) while 32% have missed estimates by more than 5% (almost in line with the historical average). Results are still slightly more positive on a market cap-weighted basis with an average earnings surprise of -0.7%.” (Goldman Sachs)