The Point for Europe Wednesday, 09 September 2026

The Point for Europe Wednesday, 09 September 2026

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

Top Call Must Read Global Equity Strategy - Back to School: Constructive on Broadening, Alert to Global Economic Outlook & Strategy - Risks Renewed Uncertainties—But Global equities traded sideways over the past month, as markets weigh up Continued Resilience competing forces likely to shape the path to year-end. On the positive side, the global economy remains resilient, global EPS forecasts have seen continued upgrades (to a very robust +33% in 26E), and “broadening” market performance is finally taking shape. On the negative side, the conflict in Iran remains unresolved, Fed hikes could be approaching, and election-related volatility could reassert itself. In the end, solid fundamentals should underpin continued gains for global equities to mid-27, with leadership shared by a combination of Cyclical and Growth sectors (Overweight global Financials, Materials, Tech). However, we acknowledge that risks around equities are more finely balanced, as negative macro/political developments could compound volatility from stepped-up scrutiny around the global AI trade. Beata M Manthey, Ph.D. | David Groman | Nikhil N Jadhav, CFA

Novartis AG (NOVN.S) - Lowering TP to CHF135 post recent pipeline events but maintain Buy Following the recent pipeline updates from Novartis (positive headline remibrutinib MS data, PIII misses for pelacarsen (Lp(a)) and del-desiran (DM1) and pausing of trials of YTB323 due to fatal adverse events), partially offset by positive remibrutinib PIII MS data, we lower our EPS estimates 1–7% and TP to $135 from $142. Despite this, we maintain our Buy rating given our new TP still represents 24% total return following yesterday’s sell-off, Novartis’s reiterated 5–6% 25–30E sales growth target, and our 5.3% remains above consensus and we see positive risk-reward into remibrutinib data in hidradenitis suppurativa 4Q26. Graham Parry | Leolie Telford-Cooke Ph.D. | Amy Y Mao | Jelena Milovic | Mahesh Mohankumar

Western Europe Aerospace & Defense - Stock crowding: Consensus Long with a more bearish positioning across A&D The Quant team’s data shows that European A&D remains consensus long crowded, although positioning became more bearish w/w as short crowding increased across all names in our coverage. This suggests investors are becoming more cautious, alongside a broad decline in historical valuation rankings. Within the consensus long bucket, Rolls-Royce remains the clearest long, while BAE, _ Leonardo, Rheinmetall and Thales also retain strong long positioning despite _

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

higher short crowding w/w. In the two-way debate quadrant, Airbus and Safran saw shorts build, while Melrose reversed last week’s positive move and saw the largest decline in long crowding w/w. MTU also remains a two-way debate and continues to be heavily short crowded. Hensoldt moved into consensus short after a sharp increase in short positioning w/w, joining Babcock, Dassault and Renk. QinetiQ remains the only name in the investor apathy zone. Rodrigo Campo | Charles J Armitage

European Aerospace & Defense - The Missing Driver In The Commercial Aftermarket: Airline Margins We know that aftermarket profits are heavily influenced by airline flight-hours, but our analysis suggests airline margins may be a better predictor of total shareholder return (TSR). We looked at the performance of aftermarket TSR over the last 15 years and airline fundamentals such as capacity, revenue and profits, segmenting TSR out between earnings growth and multiple. For Safran and MTU the data shows a clear positive correlation between aftermarket profit growth and both airline capacity growth and margins, with the market then de-rating these factors somewhat and dampening the link with TSR. This de-rating is more pronounced for capacity growth, leaving airline margins as the best explainer for TSR. For Rolls Royce, which is less of a pure play aftermarket operator, we do not observe the same de-rating, but airline…