The Point for Europe Wednesday,

The Point for Europe Wednesday, 16 September 2026

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

Top Call Must Read Global Equity Strategy - The Fed and the Long End Global Economic Outlook & Strategy - Two years after delivering its first cut of the cycle, Citi economists believe the Fed Global Resilience—Many Storm will hike rates this week. Risks from more restrictive monetary policy (from the Fed Clouds, but Still Little Rain and other key global central banks) compound preexisting worries around higher long-end bond yields. So, will higher yields derail the current equity bull market? On the Fed, we find that global equities tend to wobble around the start of hikes, while still climbing 6/12m later. On the long end, we find that underlying macro conditions remain key; equities can better digest higher bond yields when growth stays resilient, while falling inflation also helps. All this would suggest more short- term caution amid stagflationary risks from geopolitics. We nevertheless remain comfortable with our call for further earnings-driven upside for global equities to mid-27. David Groman | Beata M Manthey, Ph.D. | Nikhil N Jadhav, CFA | Scott T Chronert | Patrick Galvin, CFA

Western Europe Aerospace & Defense - Static lines vs combined arms manoeuvres - NATO doctrine suggests tanks are still needed We believe it's important to differentiate between the land conflict in Ukraine, where fighting is largely static and drones have largely taken over from artillery and tanks, and the NATO doctrine, which still requires mechanised armour. "Manoeuvre seeks to render adversaries or enemies incapable of resisting effectively....by shattering their cohesion rather than destroying each of their components through incremental attrition" (Allied Joint Doctrine for Land Operations) i.e., the NATO’s doctrine is to focus on the flanks or behind the lines, explicitly avoiding head-to-head attritional warfare. Based on this, we believe NATO would need 1) fast-moving ground forces (i.e., mechanised armour), and 2) these vehicles would need to be seamlessly connected to each other and other assets (satellites, helicopters, and drones, which will have their place). Therefore, we believe NATO would require re-fleeting of the European ground forces, necessitating large-scale orders, which could drive a rerating in Rheinmetall and... Charles J Armitage

Thales (TCFP.PA) - Positive sellside dinner Thales hosted a sell-side dinner in London last night - our main takeaways include: 1) conservative re guidance - we read this as not lowballing, but very confident can meet/beat guidance; 2) having returned to growth in Q2 (after 5 _ down quarters), Cyber growth is continuing (still confident in the "Rule of 30" _

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where margin plus growth = 30. Already at 20% margins, but not yet at 10% growth); 3) Space: commercial space seems to have stabilised for their customers, while institutional demand (mainly to ESA) is looking quite robust, particularly with the proposed new EU 2028-34 MFF (Multiannual Funding Framework) increasing spending from €19bn 2021-27 to €40-60bn 2028-34. We reiterate our Buy rating and €317 Target Price Charles J Armitage

AXA SA (AXAF.PA) - CMD feedback -7-9% EPS CAGR is not the end of the story; Downside protection and upside optionality We think that Axa has done enough with this CMD to help reverse what has become a rather significant French valuation discount. We view the 7-9% EPS target as conservatively struck with downside protection and potential upside from positive operational leverage and balance sheet deployment. P&C revenue growth is a key determinant here and Axa already has the client base - new tools offer new ways to mine this. Importantly, Axa is progressing well with integrating AI within the DNA of the group, which gives it a real edge versus local and regional peers slower to adopt. This story may be true for other large Multi-Line insurers too, but they trade on a far higher multiple. We remain very positive on the Axa share story and…