JPMorgan refreshed its European Catalyst Watch ahead of the third-quarter earnings season, calling this period a “pivotal point” for company guidance and early 2026 expectations. The bank highlighted sector divergences in its forecasts, estimating results about 2% above consensus in Insurance and Pharmaceuticals, but notably weaker in cyclical areas such as Metals, Mining, and Steel—where its models run 8% below consensus.
Luxury goods and Chemicals also face headwinds, each expected to lag by around 4%. Analysts pointed to subdued Chinese demand for luxury groups and heightened challenges for Chemicals and Paper & Packaging as these industries approach year-end. In contrast, Food and Household Products are seen as relatively well supported, while Beverages continue to show weakness in the U.S., Latin America, and China.
Positive Additions to the Watchlist
The Catalyst Watch now includes 30 companies, with Industrials accounting for the largest share at 12, followed by Materials with six and Financials with five. JPMorgan added 17 names in its latest refresh, highlighting several with strong upside potential.
Positive inclusions and drivers:
- BMW: Stabilizing China momentum, H2 EBIT forecast 19% above consensus
- Beazley: Concerns over combined ratio seen overdone, with 2H at 80.3% vs. guidance
- Endesa: Net income projected 9% ahead of consensus, backed by gas hedges and lower financing costs
- Repsol: Positioned to benefit from tight diesel markets
- MTU Aero Engines: Strong record of exceeding EBITA guidance
- Tele2: Supported by pricing power and cost savings
Munich Re, Orange, Rolls-Royce, Leonardo, Generali, and ICG PLC were also added on expectations of continued performance strength.
Sectors Facing Pressure
The bank also flagged a series of stocks at risk of underperformance. BASF was placed on negative watch due to anticipated “material earnings misses” with adjusted EBITDA 8–9% below consensus. DSM-Firmenich could disappoint if the sale of its Animal Nutrition & Health unit comes in below expectations.
Stora Enso was downgraded on weaker pulp and board prices combined with rising maintenance costs. Adecco’s H2 EBITA was forecast 3% below consensus amid margin pressure and execution risks tied to its Akkodis restructuring.
Capital Markets Day events will add further catalysts. Deutsche Bank, Generali, Metso, Munich Re, and Siemens were marked as positives ahead of their CMDs, while Lufthansa and Stora Enso were flagged as negatives heading into their investor presentations.
