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Analysts Are Too Optimistic on European Stocks, Citi Strategists Say

  • Tech, consumer durables and retail stocks seen as most at risk
  • European stocks near erasing all of July gains as risks rise

Analyst ratings are too optimistic for European companies, flashing a warning sign that has been a harbinger of stock losses in previous bear markets, according to Citigroup Inc.

Citi’s index of sell-side analyst recommendations “is back to peak bullishness,” strategists led by Beata Manthey wrote in a note. “This is a signal that has preceded further market falls in the past.”