JPJ.P. MorganSELL
JPM Europe Equity Research | Today’s Morning Meeting
- **European Sporting Goods Q2**: Tough results with limited guidance upgrades (-12% to -14% growth), DTC focus driving promotional market slowdown; JD Sports inventory controlled, wholesale growth expected Q4-2027 - **Drax EPS Revision**: -27.4% next-period EPS revision signals severe earnings deterioration, critical risk factor for utilities sector - **Rockwool Downgrade**: Neutral rating due to higher capex weighing on FCF and sourcing constraints limiting margin progression (critical risk factor) - **Marks & Spencer**: Online margin growth driving profit transition, fundamental shift enabling margin expansion and earnings momentum - **AI Spending Validity**: Report questions $1.5tr AI expenditure claim by large firms, critical for assessing tech sector investment potential and capital allocation - **European Utilities**: Low gas storage fuels earnings momentum, geopolitical energy supply dynamics underpinning positive earnings for generators - **EPS Revisions Divergence**: Drax (-27.4%) and Puma (-18.3%) severe declines contrast with Holmen (+6.4%) and CTS Eventim modest increases, indicating sectoral earnings fragmentation