JPM | FTM | Today’s Research | Europe

Research evidence excerpt

JPM | FTM | Today’s Research | Europe

Europe Equity Research

Europe First to Market 23 June 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

What could a Burnham premiership mean for stocks and sectors? With Keir Starmer having resigned and

Andy Burnham confirming his bid to replace him, please see analysis on potential implications from our

sector teams here: UK Spotlight: Makerfield Matters: Sector and Stock Implications of the UK’s

Shifting Political Landscape.

Today’s Morning Meeting

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

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, 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