JPM Europe Equity Research | Today’s Morning Meeting

Europe First to Market 07 September 2026

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

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

Regional calls: Non-US is ahead so far ytd; EM vs DM is working again

For the overall equity call, we believe that a robust activity backdrop will prevail, with continued upward earnings momentum - weekly EPS revisions keep improving, now net positive in all key regions. Indicators such as US ISM and Eurozone manufacturing PMIs are at/near 4-year highs. Despite this, many continue to fear a material correction, and we accept that geopolitical risks, and indirectly the inflation bond yields headwinds, could become more significant. Having said that, as corporate profits remain on an uptrend, any bout of weakness in equity prices would leave them cheaper. We believe one should continue using the dips to add. Rising bond yields, and even some moderate central bank tightening, are unlikely to derail the constructive equity picture, as long as inflation expectations do not get de-anchored. Here, wage growth continues to move lower in most places, in a huge contrast to 2022. Last Friday’s payrolls were instructive, with robust hiring, but also the lowest yoy rate in hourly earnings since Covid. Regionally, MSCI AC World ex US is up again vs the US this year, by 4%, total return in USD. This follows last year’s 15% outperformance. Regional earnings differential is narrowing. We continue to believe that in 2H AI might not be able to dominate equity returns to the extent that it did before. USD view is relevant, as well. We also stay OW EM vs DM, still up 11% relative ytd, after 13% beat last year. Positioning is light in EM in general, and flows could pick up again. Also, EM valuations continue to show record cheapness vs DM.

Init | European Value Added Resellers (Joseph George)

Initiating on Bytes at UW and Bechtle at N, reiterating Computacenter (OW) top VAR pick

We initiate coverage of Bytes Technology Group (UW) and Bechtle (N), to complement our existing coverage of the European value-added-reseller (VAR) subsector. In this note, we address the most salient discussion points for VAR investors, including AI monetisation, the threat of disintermediation, changes to vendor incentives and more. As a result of our analysis, we reiterate our current preference for those VARs that are most geared into AI monetisation, preferably those exposed to hyperscale CAPEX. In this regard, Computacenter (OW) is our most preferred name within the subsector. We initiate on Bytes at UW, seeing risk to consensus estimates owing to recent changes in vendor incentives, alongside a relative lack of tangible AI exposure (hardware <10% of GP) vs. peers. We rate Bechtle N, reflecting its business quality with finely balanced consensus expectations for a cyclical recovery in earnings growth.

CW | Legrand (Phil Buller) (LR FP, OW)

Placing on Positive Catalyst Watch into the CMD, growth should continue to accelerate

EMEA Equity Research AC Europe Equity Research ( September 2026 JPMORGAN

Legrand looks increasingly likely to compound revenue organically in the sector-leading Schneider Electric 7-10% range to the end of the decade, which compares to the 3-5% range offered at the 2024 CMD, which has been loosely upgraded to ~5% since and compares to consensus of c6% (JPMe: c8%). That said, we'd expect the company to maintain its typically conservative approach and most likely straddle consensus rather than looking to delight short-term market participants with an optically punchy guide. Based on our recent investor conversations, expectations are relatively muted and there are concerns regarding the data center portfolio alignment over the longer term too. We expect the company to give a reassuring message on growth and positoning at the CMD on September 29th, which should ultimately be positive for the shares which continue to screen too cheap – we therefore place the shares on Positive Catalyst Watch and reiterate our street high price target of €200 offering c40% upside on an 18 month view.

Sinch (Akhil Dattani) (SINCH SS, OW)

Stock at a 4 year high. But we see plenty more…