European Banks Daily

Research evidence excerpt

European Banks Daily

Kian Abouhossein AC Europe Equity Research

(44-20) 7134-4575 14 July 2026 J P M O R G A N

kian.abouhossein@jpmorgan.com

increased volatility, but it should not result in prolonged market selloffs, in our view, especially

if the earnings backdrop remains resilient. Now, Q2 earnings growth projections by consensus

appear punchy at face value, and unlike typically, this time around there were no net downgrades,

but continued increases in forecasts. We do not believe this is necessarily a red flag. Median Q2

EPS growth projections stand at 8% for both the US and for the Eurozone, which we believe is

very achievable. Also, activity has been improving of late, as seen in the acceleration in the

OECD lead indicator, and in a big move higher in Eurozone CESI, of 85+ points, entering net

positive territory. Big picture, macro indicators remain consistent with further earnings upside,

and this is especially for Cyclical sectors. Eurozone EPS revisions have been rising in the past

weeks, moving into outright positive territory. The gap with the US has narrowed, on the brink

of fully closing for the first time since early 2025. Provided the Iran conflict doesn’t fully re-

escalate in 2H, we think this improvement can continue, and expect Eurozone to show strong

double-digit EPS growth this year, in contrast to the stagnation that took place since 2022. At the

sector level, Banks are likely to deliver reassuring results, and we note that Semis price relative

and earnings are opening up a gap, where strong results could drive a rebound in the space.

Energy earnings relative does not show any cushion vs oil price any more. Click here for the full

note

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