Citi analysts said in a recent note that they continue to forecast broadening European market leadership over the medium term.
The view comes despite the fact that European markets have narrowed in the year-to-date.
"Broadening EPS growth is the key driver of our broadening call. Greater clarity on macro and central bank policy could also help," explained Citi.
They added: "Our favorite broadening trade is European small/mid caps, as the group is more levered to lower rates and improving economic conditions than other laggards."
The investment bank refreshed its views based on the improving balance of risks for Small and Mid-Cap stocks in the region. They stated that based on Citi economists' forecasts, small and mid-caps could see earnings per share growth of +13%, roughly double the Stoxx 600.