JPM Europe Equity Research | Today’s Morning Meeting

Europe First to Market 27 July 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting Equity Strategy (Mislav Matejka, CFA)

A pickup in corporate activity and in shareholder activism in Europe

The latest Iran flare-up notwithstanding, we remain constructive on European equities, which earlier this month recorded a fresh all-time high, and we upgraded our targets further last month. Earnings are picking up after 3 subdued years, and we do not believe inflation expectations will get de-anchored, which might allow the ECB to hike less than is currently priced in the markets. Eurozone CESI spiked to 2-year high, and PMIs, credit growth and earnings revisions are all on the uptrend. After an outperformance vs the US last year of 7% in LC terms, total return, Eurozone equities are just about ahead again this year, at 12% vs 9%, respectively. We recently argued that the latest Momentum unwind was becoming mature. Still, we continue with the call of rotation and broadening into 2H, with AI unlikely to be “the only story in town.” Separately, shareholder activism in Europe is likely to pick up: the common activist target profiles are undervalued companies with identifiable governance, capital- allocation, or operational value levers, that are not in financial distress. European equities broadly fit this description, trading at persistent valuation discounts to their US peers despite resilient cash generation, with the UK and Germany in particular seeing a pickup in campaign volumes. Proposed regulatory revisions in the EU could accelerate activism in the region, and European corporates with healthy balance sheets and conservative payout policies are natural candidates. A growing number of campaigns are focusing on increasing shareholder returns; backtests show that the 12 month forward returns of companies where activists target capital return are strongly up. European buybacks continue increasing, making fresh highs and narrowing the gap with the US, while total European shareholder yield is continuing to improve vs the US. In addition, M&A and consolidation is a growing theme in Europe, where a high proportion of companies trade below book value, at 20% in the UK and 15% in Germany and France, compared to a global average at 10%, and the European Commission has been focusing on the EU’s broader competitiveness agenda. European M&A volumes have been rising since their 2023 low and is expected to remain resilient through 2026. Banks, Asset Managers and Telecoms are among the sectors which are seeing increasing corporate activity. Separately, IPOs are picking up in Europe, but in a more muted fashion.

From Autonomous Cars to Humanoids (Jose M Asumendi/Nick Lai/Rajat Gupta/Akira Kishimoto/Sonny Lee/ Marcelo Motta/Amyn Pirani)

Automotive industry embraces Humanoids

The Global Auto sector embraces the Humanoid space globally through the entire value chain ranging from part suppliers, to manufacturing of Humanoids as well as integrating Humanoids in the manufacturing process. In this note, we identify by region within our coverage some of the companies most likely to benefit from the Humanoid megatrend.

| CW | Hearing Aids - is market growth accelerating? (David Adlington)

Demant is our preferred near-term play. Upgrading Amplifon to OW on significant re-rating potential

EMEA Equity Research AC Europe Equity Research ( July 2026 JPMORGAN

There are two key drivers for Hearing Aid share price performance: 1) Hearing Aid market growth - a tide that raises (or sinks) all boats; 2) New product launches that drive share gains/growth ahead of the market which is more stock specific. After a slower 2025, we see scope for the market to accelerate in 2026 to levels above that assumed in all the companies’ guidance.

Wolters Kluwer (Daniel Kerven) (WKL NA, OW)

Info Service Series: Tax in an AI world. The jewel in WK’s tarnished crown & the key to its investment story

Wolters Kluwer Tax & Accounting is key to the WK investment story. We estimate that it now underpins 68% of the current EV. Tax is a much better business than the market thinks, and AI makes it even better. If you can get…