J.P. Morgan International FTM 23 Jun 26 European Chemicals; Unibail-Rodamco-Westfield; Innostar Service; Hong Kong Residential Property; Chipbond Technology; Asia Insurance; China SMid Insurance and More

Research evidence excerpt

J.P. Morgan International FTM 23 Jun 26 European Chemicals; Unibail-Rodamco-Westfield; Innostar Service; Hong Kong Residential Property; Chipbond Technology; Asia Insurance; China SMid Insurance and More

Global Equity Research

International First to Market 23 June 2026

Top Stories

CW | European Chemicals (Chetan Udeshi, CFA/Angelina Glazova, CFA), France, Netherlands, Belgium,

Germany, Switzerland, United Kingdom, Denmark, Norway

Structural headwinds back in focus after temporary tailwinds fade

Cyclical chemical stocks have lagged in recent weeks as easing Middle East (ME) geopolitical risk shifts investor focus away

from potential 2Q26 earnings beats and back toward structural headwinds: significant industry overcapacity (especially in

China) and intensifying competition in specialty products from Chinese and other Asian producers. We see substantial

downside risk to 3Q26/2H26 and 2027 consensus earnings across much of the cyclical chemicals complex (Table 1 JPMvsconsensus:adjEBITDAfor2Q26andFY26/FY27-Table 3 JPMvsconsensus:adjEPSfor2Q26andFY26/FY27),

with estimates still well above the weak early 2026 earnings run-rate seen before the ME-driven uplift. With the geopolitical

backdrop evolving and worsening earnings exit rates coming out of 2Q26, management teams may guide conservatively for

2H26 even if they deliver 2Q beats. Brenntag’s trading update last evening illustrates the disconnect: despite guiding 2Q

adjusted EBITDA to ~22% above Vara consensus, the midpoint of its upgraded FY26 adjusted EBITDA guidance still implies

~12% downside versus current 2H26 consensus (with top-end of new guidance in line with current consensus). Overall, a likely

return of “sector blues” argues for greater selectivity and an emphasis on favorable bottom-up stories.