European Capital Goods: The Nuts & Bolts: July 2026 Chartbook

Research evidence excerpt

European Capital Goods: The Nuts & Bolts: July 2026 Chartbook

Macroeconomic drivers and valuation

• MSCI Europe Capital Goods trades at a 51% premium to the market, near all time peak versus the 15-20% historical average.

• Our coverage is trading at a 30% premium. This is broadly in line with the ~29% historical average.

• The discount of European Cap Goods versus the US remains higher than the historical average.

Figure 13: JPM Capital Goods coverage and MSCI Europe Capital Goods sector adj. P/E vs market Figure 14: Premium of defensive / quality stocks vs cyclicals in our coverage

and level of manufacturing PMI The premium of defensive stocks is below the 15-year average

60% 60 140%

50% 120% Global manufacturing 55

40% PMI (RHS) 100%

30% 50 80%

20% 60%

10% 40%

0% 40 20%

0% Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Jul-24Jan-25Jul-25Jan-26 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 26

MSCI Europe Cap Goods vs market (LHS) Our coverage vs market (LHS) Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan

Source: Eikon (Jun 2026) Source: Eikon (Jun 2026)

Figure 15: Europe vs US Capital Goods - 12 month forward adj. P/E premium / discount Figure 16: MSCI Europe Capital Goods – 2026 and 2027 EPS Estimates

European Capital Goods continues to trade at a significant discount to the US 2026E and 2027E EPS estimates have continued to rise in June, due to an improving geopolitical backdrop and FX

MSCI Europe Cap Goods vs MSCI US Cap Goods LT average 2026 EPS 2027 EPS

32 10%

5% 30

0%

28 -5%

-10% 26

-15%

-20% 24

-25% 22