Recession Threat Ignored as Europe Profit Revisions Jump

In the tug-of-war between investor optimism and analyst skepticism in Europe, the advantage is going to the equity bulls.

Analysts who raised profit estimates for European companies exceeded those cutting them this month for the first time since April 2012, a sign of optimism after corporate income fell in two of the last three years. A revision index compiled weekly by Citigroup Inc. turned positive on Sept. 5 after the European Central Bank unexpectedly cut interest rates and announced a plan to buy securities.