JPM | Industrial Strength Morning Messages: Nato Summit, Iran Strikes, DSM Firmenich onto -ve CW, UK Homebuilders, NSISB, IMI Previews

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JPM | Industrial Strength Morning Messages: Nato Summit, Iran Strikes, DSM Firmenich onto -ve CW, UK Homebuilders, NSISB, IMI Previews

rly for fragrances, is driven by a pre-buy or whether there is an improvement in end market demand. We

think there has been a pre-buy - and that consensus for DSFIR has got ahead of itself. Chetan adds the stock to -ve

Catalyst Watch and highlights the risks to H2 consensus - both on revenues (where we think the pre-buy dissipates) and on

margins where consensus models higher margins in H2 than were seen in Q1 when the normal seasonal pattern is for H2

margins to be below Q1. We note, in addition, that Q1 already benefitted from some degree of pre-buy which makes the

challenge for DSFIR that much more acute. For Novonesis, Chetan’s note is a more regular preview - but we expect the

Company to report 7% OSG in Q2 and 11% organic EBITDA growth. We are 4-5% ahead of consensus for 26/27/28E

and hope that a solid Q2 print will remind investors that Novonesis is a better growth compounder than DSFIR.

• NATO SUMMIT: Lots of headlines being generated with €50bn of orders announced yesterday. The Countries that have

increased defence spending are highlighting that they have - the pressure on the others remains significant but budgetary

constraints also remain real. Nato did say yesterday that it would provide a demand signal to the defence industry to assist

with building out the required industrial capacity - but we will not get details on exactly what is needed. President Trump is

clearly unhappy with what he perceives as a lack of support in Iran from other Nato members. The fact of renewed strikes

while the summit is ongoing will make discussions today interesting, particularly when he has reopened the Greenland ‘issue’.