Citi The Point for Europe Tuesday, 04 August 2026

The Point for Europe Tuesday, 04 August 2026

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

Top Call Must Read Global Diversified Metals & Mining - Iron ore producer breakevens are rising, with cost support emerging at $85/t Global Economic Outlook & Strategy - This report updates our proprietary 2026 iron ore cost curve, based on a modelled Renewed Uncertainties—But universe that represents ~84% of expected global seaborne iron ore supply in Continued Resilience 2026. The cost curve points to an industry effective cost support of around $85/t, and at this price level ~100Mtpa or 6% of seaborne supply, would be uneconomical. We believe non-mainstream supply, and high-cost producers would face increased pressure in the $85-$95/t range. In our view, iron ore equities are pricing in an average $93/t. Our cost curve analysis provides bottom- up support for identifying potential price troughs and periods when equity valuations imply iron ore prices below cost-curve-supported levels. Ephrem Ravi | Alexander Hacking, CFA | Thiago Ojea | Krishan M Agarwal | Gabriel Barra

Brunello Cucinelli (BCU.MI) - Knitting a Durable Moat - Initiate with Buy and €110 Target Price We initiate coverage of Brunello Cucinelli with a Buy rating and €110 target price. We believe its competitive advantages can endure longer than the market discounts: Humanistic Capitalism reinforces brand credibility, its affluent client base should support relatively resilient demand, while Asian expansion, deepening Western client relationships and a maturing retail network offer several routes to market-share gains. We expect measured margin progression, but capex normalisation could improve FCF conversion. We forecast FY25–28E sales, adjusted EBIT and EPS CAGRs of 12%, 15% and 16%, respectively, placing us 3%, 7% and 8% above VA consensus by FY28E. Following a ~15% de-rating relative to peers in the last 12 months, BCU trades at 33x FY27E P/E, towards the lower end of its historical 29-56x range, while its premium has narrowed to ~60-70% (from ~100%). We think current brand-related concerns are overdone, offering an attractive entry point to a compelling long-term growth story. Alberto Cecchetto

Adyen N.V. (ADYEN.AS) - Growth Improving into Q2, Competition Fears Overdone; Buy Adyen shares are down 34% YTD amid concerns around consumer spending, rising competition and the company's evolving M&A strategy. However, our customer tracker, take-rate analysis and recent peer results suggest no meaningful _ deterioration in spending trends, wallet-share dynamics or competitive intensity. _

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

Recent acquisitions further reinforce Adyen's strategy of expanding beyond payments into adjacent layers of the commerce stack, including billing infrastructure for AI-native businesses and agentic commerce. We continue to view the recent pullback (c.24x/19x 2026/27e PE) as an attractive entry point into a multi-year structural growth story. Buy, +ve Catalyst Watch. Pavan Daswani, CFA

Company AstraZeneca PLC (AZN.L) - Expanded thoughts on AZN-BMY speculation: Deal risk driving shares down; searching for a rationale Expanding initial thoughts on the FT article suggesting AZN/BMY talks. If true, talks would be a surprise given: 1) AZN's strong pipeline sets it up to beat its $80bn 2030 revenue target, deliver 15% EPS CAGR27–30E, and largely offset LOEs post- 2030; 2) a deal would likely be dilutive to 25–30E growth given BMY's LOEs of Eliquis and Opdivo in 2028 (c.$27bn 26E sales/c.50% of revenue) with synergies needed to offset the headwind; 3) potential antitrust issues (large oncology businesses/ PD(L)1s Imfinzi and Opdivo); 4) complicated UK politics if AZN attempts to redomicile into the US. That said, we see some portfolio rationale and overlapping therapeutic areas could aid synergy potential, and a deal may boost post-2030 growth when AZN hits its largest LOEs. With the share price reaction today leaving AZN on only 14x 27E, we feel quite a lot of deal risk has been priced in already. Maintain Buy. Graham Parry…