European Equity Strategy: Earnings Season Monitor - A Strong Season

Research evidence excerpt

European Equity Strategy: Earnings Season Monitor - A Strong Season

IdeaM

European Earnings Season Key Charts

Exhibit 3: Our analysts' reaction to earnings data shows a Exhibit 4: In terms of guidance, our analysts now expect a

+25% skew towards beats so far this earnings season, up from positive skew of +8% to net upgrades to NTM EPS consensus vs

21% in our last take 6% in our last take

Financial results vs consensus according to MS analysts (% of Net beat: Impact to NTM consensus EPS according to MS analysts (% of

Net beat:

companies) companies) 3Q25 21%

60 45 57 3Q25 3% 41 4Q25 24% 53 53 38 4Q25 -1% 40 37 1Q26 25% 50 1Q26 8% 35 34 35

30 40

20 17 16 21 24 20 24

15 20 18 15

10 8 7 8

5 4 4 4 10 4 4 3 2 2 1

0 0

Meaningful Modest Shortfall In-line Modest Upside Meaningful Meaningful Modest Revision Largely Modest Revision Meaningful

Shortfall Upside Revisions Lower Lower Unchanged Higher Revision Higher

Note: Data is based on analyst published reaction to earnings, universe is Morgan Stanley European Note: Data is based on analyst published reaction to earnings, universe is Morgan Stanley European

Research coverage. Source: Morgan Stanley Research. Numbers are rounded. Research coverage. Source: Morgan Stanley Research. Numbers are rounded.

Exhibit 5: Europe vs US: Europe's positive skew to EPS beats Exhibit 6: Despite a solid net skew for Europe, the gap between

continues to meaningfully lag the US; US skew to beats is US and European skews to EPS beats is wider than last quarter

currently +54% according to our analyst data MS Analyst Earnings Reactions - Financial Results vs Consensus: US vs Europe net

skew (upside vs downside)

Financial results vs consensus according to MS analysts (% of companies) 60%

60 Net skew: US Europe 51% 54%

US 54% 50% 49%