Brexit​ negotiations and surging support for populist political parties in a year packed full of important elections have failed to dampen Goldman Sachs’ (GS

) enthusiasm for European equities. In the investment bank’s view, stronger global economic growth and less commanding valuations should see companies on the continent continue to perform better than their U.S. counterparts in 2017. (See also: Should Investors Worry about Marine Le Pen?)

Goldman Sachs predicts that the the STOXX​ 600 index, home to Europe’s biggest stocks, will climb 3 percent over the next 12 months, versus a 1 percent slide in the S&P 500. Here are the main reasons why. (See also: Goldman Identifies the Most Profitable Stocks for 2017.)

Global Growth

The bank’s analysts predict that global gross domestic product (GDP) growth will come in at a slightly better 3.7 percent over the course of 2017. Rising economic output, they note, generally tends to favor European stocks over U.S. stocks due to the more cyclical nature of companies on the continent.

This observation,…