Citi The Point for Europe Friday

The Point for Europe Friday, 31 July 2026

Top Call | Company | Industry | Strategy & Economics | Fixed Income & FX | Key Rating and Target Price Changes

Top Call Must Read UK Economics - BoE view: An MPC that really does not want to hike Global Economic Outlook & Strategy - The July MPR shows how little appetite the Committee has to raise Bank Rate. In Renewed Uncertainties—But their communication, the MPC focused on the growing slack in the real economy Continued Resilience to justify their stance. However, we think their inflation profile is too weak. May Rostom | Callum McLaren-Stewart

Rentokil (RTO.L) - Time to buy the dip? RTO shares are now trading below levels when we last had takeover talks, with the reset out of the way, progress made, and potential for value creation from portfolio pruning / US relisting. Marc Van'T Sant | Arthur Truslove | Saifabbas Sayed

Global Chemicals Cracker - A More Constructive Backdrop A solid start to earnings season suggests conditions for upstream chemicals have been improving. Pricing and volumes have generally come in better than expected, while management commentary points to stable demand trends and no signs of demand destruction. While any benefits from the ME-conflict are likely to prove temporary, macro indicators continue to improve, supporting the case for a gradual recovery in underlying demand. Margin trends remain mixed, however, with spreads still under pressure across regions and higher oil prices posing a near-term headwind. Sebastian Satz, CFA | Ranulf Orr, CFA | Omi Pallavi | Patrick Cunningham | Oscar Yee

EDP Renewables (EDPR.LS) - All in good time; we reiterate Buy In our view, EDPR's 1H26 results with FY26 guidance upgrade and recent asset rotations all point to an improved operating environment and underpin a conservative set of consensus forecasts. What is yet to be priced in the EDPR shares, in our view, is the growth upside from FY28–30, reflecting a combination of repowering opportunities, value-creative asset rotation, and PPA renegotiations, for which EDPR has committed to providing an update at its CMD in 2Q27. With potential for further disposals in 2H—and if current robust power prices were to continue—we could see further upward pressure to FY26 earnings. In our view, for EDPR shares to re-rate from here, we need to see consistent delivery operationally _ (on-time and on-budget projects, as well as value-creative disposals) and more _

See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.

concrete plans/targets for future growth, both of which we believe will come through over the next 12 months. Buy. Jenny Ping

EDP (EDP.LS) - Waiting for delivery. Buy EDP 1H26 results demonstrated a solid set of operational delivery, earnings upgrade for FY26 and commitment of a CMD in 2Q27 to cover medium term growth opportunities. But the markets wanted more concrete targets. In our view, the set up into 2Q27 CMD is supportive; 1. CEO talked to announcing c.500MW of powered land capacity in the coming months; 2. Opportunities for another asset rotation with robust EV/IC in 2H that contribute to earnings and brings confidence to multiple sustainability; 3. CMD with outlook through 2030 that encompasses more investments at EDPR (repowering, PPA repricing and capacity growth), network growth and FlexGen optimisation opportunities. EDP continues to trade at a discount on PE and EV/EBITDA, respectively, versus integrated peers and the discount on EDP stub is even more difficult to rationalise. We continue to highlight EDP as one of our preferred integrated utilities and reiterate our Buy. Jenny Ping

Company Allianz SE (ALVG.DE) - Allianz paying €1.4bn to acquire 4.4% of Pimco B-Units Today Allianz announced that it is paying €1.4bn to acquire 4.4% of Pimco B- Units. The purchase price implies a Pimco valuation of €31.8bn which compares with our valuation of €37bn for total Asset Management (~85% of which would be Pimco). So the valuation is consistent with our own (~€30bn). We estimate a broadly neutral impact on EPS. A key question is why now, and if this might imply M&A could be more possible since it reduces minority leakage.…