Europe (1K) | Ratings down, estimates up

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Europe (1K) | Ratings down, estimates up

12 May 2026

Europe

All Caps

Earnings radar

Ratings down, estimates up

54% earnings beat rate with c. 64% of results out in Europe

So far, 64% of STOXX 600 companies have reported Q1 results, with an average

earnings beat rate of 54%, fully in line with history. By sector, Materials stands out as

an outperformer, while Communication Services ranks at the bottom. In the US, the

earnings beat rate is 82%, above history, with IT at the top of the beats. We have seen

limited guidance changes due to the Middle East situation, although future risks were

flagged in many cases (details by company at the end of the report).

Since end-March, we have downgraded 36 stocks, in many cases on valuation

grounds, while upgrading 27 stocks. Conversely, QTD, our 2026 net profit estimates for

our coverage have been revised up by c. 4%, although this has been highly

concentrated in a few sectors: Oil (higher oil prices) and IT Hardware and Semis

(strong Q1, guidance raises). We don’t rule out estimate cuts in the coming quarters

from the indirect effects of the Middle East conflict, depending on how long it lasts.

Sector trends in the spotlight, investment ideas after Q1

In this edition, we cover the main sector takeaways across Italian, French, Spanish,

and UK Banks, Asset Gatherers, Aerospace and Defence, Chemicals, Autos, Pharma, Natalia Bobo

Co-Head of Institutional ResearchMetals & Mining, Semis, Food, Oil & Gas, and Media. We also provide investment ideas +34 914 36 5165

among stocks penalised after weak Q1 releases – including Rovi, Rheinmetall, and nbobo@keplercheuvreux.com

Siemens Healthineers – and some cases in which our conviction was reinforced after Marco Baccaglio, CFA

strong earnings –including Infineon in large Caps and BAM in SMIDs.