JPM Europe Equity Research | Today’s Morning Meeting

Europe First to Market 08 September 2026

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

Today’s Morning Meeting European Banks (Kian Abouhossein)

2H26 Outlook: Remain OW for a perfect environment, despite first signs of end of the cycle behaviour…

We remain OW European Banks which currently operate in the perfect environment, in our view, of: i) sweetspot 2-3% ECB rates, ii) lending momentum with some help from the AI Capex cycle, iii) strong capital markets performance in upward trending equity markets, iv) cost discipline, and v) no signs of material asset quality deterioration considering low unemployment. Overall, this confluence of factors is leading to an average 8.8% p.a. pre-provision profit growth over 2025-28E and with bank managements so far being rational around M&A, the payout to shareholders remains attractive at c.75% of total profits leading to a 7.7% total payout yield 2028E. Our new European Banks top picks portfolio is: DBK, UBS, ING, NatWest, STAN and Erste.

| AFL | European Infrastructure (Elodie Rall)

H2 Outlook: Deep value across the sector albeit timing for re-rating remains uncertain; Upgrade ADP on upcoming regulatory visibility

The European infrastructure sector has de-rated ~15% on average since the start of the Iran conflict in response to rising bond yields, the elevated oil price, the resultant weaker traffic trends, together with rising concerns regarding French political risk and (at Ferrovial) worries the company overbid for the I24 project. We see value across both toll roads and airports, which have de- rated ~21% and ~11%, respectively. Within airports, we see the most upside at Fraport and ADP. We upgrade ADP to OW as, despite the poor political French landscape, we see potential for outperformance from upcoming regulatory visibility, with the new ERA expected to provide protection against inflation and higher taxation. On Fraport (OW), following the strong underperformance, we see potential for focus to return to the company’s FCF inflection, and where the stock should be a key beneficiary of any ceasefire news. We are Neutral on Aena, where we see less upside after the outperformance this year, and on Zurich Airport, where traffic momentum is expected to slow and the ramp up at Noida is facing headwinds. While we see deep value emerging in Vinci (N) and Eiffage (OW), with current valuations now implying again zero value attributed to French toll roads, we acknowledge that political visibility and improved traffic trends will likely be necessary to crystallise this value. Ferrovial (OW, AFL) has underperformed since the I24 project win, and while the company struck a confident tone in our Back to School call last week, there is a risk the debate continues to weigh on the stock until the company can provide more detail. We are Neutral on Getlink, where traffic trends are mixed but generally underpinning estimates, but note that the stock’s protections against French politics, and its dividend yield position it attractively in the coming months relative to French peers.

EU Oils ‘Back to School’ Feedback (Matthew Lofting, CFA)

Faltering inventories hard to ignore; Reiterate OW Eni, Shell, Iberian names over OMV in midcaps

EMEA Equity Research AC Europe Equity Research ( September 2026 JPMORGAN

Our ‘Back to School’ seminar hosted a range of Majors, OFS and E&Ps on drivers and catalysts through year end. The key message was that commodity inventories are fast approaching ‘code red’. In Europe, the region’s (increasingly) short position across multiple O&G products means this is driving prices higher across the board and points to a tough re-stocking journey. At forward strip based $75 Brent for 2027 we forecast an EU Oils FCF yield of 9.3%. The sensitivity around that is 150bps per $10 oil and 30bps per $1 refining. The seminar reinforced our conviction in OWs on Eni and Shell. Elevated refining benefits all midcaps; discussions suggested the Iberians (OW Galp) are better placed than UW OMV.

Lottomatica (Estelle Weingrod) (LTMC IM, OW)

Lotto x Cirsa pro forma implies meaningful share price upside potential

Following last week’s announcement of a proposed…