what happens to stock prices of EU companies if the Euro weakens?

Well, for companies that do a lot of exports such as Lamborghini, Ferrari, etc. their share prices are actually going to rise because most of their cars are bought in US Dollar from clients residing outside of Europe. If these companies get paid for their products in USD, they can convert this dollar back to euro and declare higher profit, pay dividends etc. which boosts their stock price.

However, companies that rely on local consumption of their products within the EU may see a drop in profitability if the Euro weakens because EU citizens will see most of their purchasing power eroded & may choose to go for cheaper alternatives to save cost.

If tthe weakening of the euro is caused by inflation, the ECB may have to hike rates thus making it hard for EU companies to access loans for expansion so they may declare less profits and the stock price will fall

If the euro weakens, many EU company stocks go up

This is especially true for exporters — companies that sell products outside Europe (like BMW, Airbus, LVMH, Siemens).

Why?

Their goods become cheaper in other countries.

They earn revenue in stronger foreign currencies (like USD).

When they convert those earnings back into euros, they get more euros.

👉 Weaker euro = bigger profits for exporters = stock price often rises.

Some EU company stocks may fall or struggle

This mainly affects companies that import a lot or rely heavily on materials priced in dollars (like oil, metals, electronics components).

Examples:

Airlines (fuel costs rise)

Retailers importing goods

Energy companies dependent on USD-priced commodities

Why?

Imports become more expensive

Profit margins shrink

Higher costs → pressure on stock price