European IG Capital Goods: Electrified

Research evidence excerpt

European IG Capital Goods: Electrified

J P M O R G A N Europe Credit Research

06 July 2026

European IG Capital Goods

Electrified

We expect the European IG Capital Goods sector to continue to capitalise on Europe Corporate Credit - Basic

structurally growing demand for electrification, reinforced by a surge in datacentre Materials and Industrials

demand, and report solid Q2 2026 results in the coming weeks. Visibility has also Benjamin Defay AC

improved in the last month thanks to a more benign geopolitical backdrop and we (33-1) 4015 5047

believe the long-term outlook is underpinned by secular trends that will translate into ben.defay@jpmorgan.com

healthy cash generation in the years to come. Meanwhile, the sector's balance sheets Guillaume Jouandin

remain strong with low leverage, despite a pick-up in M&A activity. With spreads (44-20) 7134-1538

justifiably tight in our view, we remain OW on SUFP/ABBNVX/ATCOA/EPIBSS guillaume.jouandin@jpmorgan.com

and UW on ALOFP/SIENFI/SIEGR. Samuel Gosling

(44-20) 7134-0456

• Expect another round of solid results. We expect the European IG Capital samuel.gosling@jpmorgan.com

Goods sector to report solid Q2 2026 results, with electrical companies (SUFP, J.P. Morgan Securities plc

ABBNVX, SIEGR, LRFP) likely to record another period of healthy earnings

growth. The rest of the space should benefit from strength in the mining

(EPIBSS, SANDSS) and energy (ALFASS, SIENFI) end markets, partly offset Credit Ratings

by continued soft demand in automotive (SKFBSS) and mixed trends in Credit Ratings JPM

construction (ASSABS). Overall, we expect the vast majority of companies in ABBNVX A2/A OW

ALFASS na/BBB+ OW

our coverage to report solid results from a credit perspective. ALOFP Baa3/na UW

• Strong outlook, but growing reliance on datacentres.