JPM | Industrial Strength Morning Messages: German Reform, Rheinmetall cuts, Prysmian u/g

Research evidence excerpt

JPM | Industrial Strength Morning Messages: German Reform, Rheinmetall cuts, Prysmian u/g

Specialist Sales J P M O R G A N

03 July 2026

JPM | Industrial Strength Morning Messages: German Reform,

Rheinmetall cuts, Prysmian u/g

Sam Edmunds

+44 207 742 8733

sam.edmunds@jpmorgan.com

Today:

In Focus Today

• Good Morning and Happy Friday. Markets are looking more cheery this morning. Asian stocks, and semis in particular are

recovering from yesterday’s sell off. European markets were also in a better mood yesterday - albeit with a healthy dose of

rotation into some of the deeper cyclicals - and the package of German reforms announced seems to have been one of the

drivers. Our European Economist, Greg Fuzesi has a recap of the measures HERE- and while the tax cut is likely helpful

to consumption it is the Labour Reform, ‘Cutting Bureaucracy’, ‘Industrial Policy’ and ‘China and Trade Policy’ segments

which are more important and potentially helpful for industrial companies. Reducing bureaucracy can help construction,

labour reforms are helpful across the board - but maybe most for the autos sector where, as per VW press reports over the

week, a sizeable restructuring is likely. Industrial and China and Trade policy might offer some support to the Chemicals

sector - and is also likely to benefit defence.

• RHEINMETALL: Defence does need some help - but Rheinmetall also needs some communication assistance. The

Company hosted a very brief pre-close call last night - and the message on Q2 was OK despite the loss of the F126 contract.

Orders elsewhere look better and the 60% revenue growth, which incorporates some catch up from Q1 was reiterated.

Nonetheless, David has cut his forecasts in the outer years substantially this morning. It will be interesting to see whether this