How European stocks can weather higher energy prices

Higher oil and gas prices are again raising questions about Europe’s dependence on imported fuel as winter approaches, but portfolio managers say the region’s public companies are far less exposed than they were in 2022. Amundi’s Ciaran Callaghan said the immediate impact for large listed firms is “manageable,” with the burden falling more on consumers and smaller companies with fewer diversified energy sources. Morgan Stanley estimates direct energy costs are typically a low single-digit share for many industrials, while Deutsche Bank estimates energy costs around 1% of sales for STOXX 600 companies. Market composition and higher weights in banks, plus an AI-driven earnings boost, are supporting resilience.