JPM | EMEA Spec Sits Daily: EZJ LN/Apollo, SUBC NO/ SPM IM, mining note with AAL LN on -ve cat watch

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JPM | EMEA Spec Sits Daily: EZJ LN/Apollo, SUBC NO/ SPM IM, mining note with AAL LN on -ve cat watch

g valuation support at current commodity prices. However, we retain a cautious

bias pre-Q2 reporting as we expect: 1) cost-inflation driven earnings disappointments; and 2) fluid geopolitical and

commodity price risks. We see the greatest cost-driven risks in Anglo American (UW) due to unique exposure to

high Brazil and South Africa iron ore freight rates. We sit -6% vs BBG consensus for H1’26 EBITDA and we place

Anglo on Negative Catalyst Watch for 23 July.

• Glencore - Glencore has potential to announce a new excess shareholder distribution, as the lock-up for its $3.4bn Bunge

shareholding expired on 2 July, but the share price impact may be neutralised by higher costs. We forecast Anglo

American and Glencore are likely to be most negatively impacted by higher freight, diesel and sulphuric acid costs in Q2.

• Deutsche Telekom -Overhangs continue to dominate. But valuation is becoming increasingly difficult to ignore- Akhil

Dattani here

• DT’s near-term fundamental attractions remain intact. Critically, the company seems well positioned to sustain its

impressive double-digit EPS growth algorithm, leaving management on track to hit their 2027 guidance ambitions. That

said, a unique cocktail of strategic longer-term overhangs has steadily eroded confidence, driving a 30% sell-off from the

March 2025 highs, and reducing valuation multiples to record lows. Whilst we accept it will likely take several quarters

for visibility to improve, we suspect investors will find these valuation levels increasingly difficult to ignore. Focus areas

include: (1) Satellite disruption fears. This debate will likely persist for some time. That said, we note SpaceX’s recent