J.P. Morgan sees challenges for European general retail as inflation bites

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21/06/2022 09:51

** J.P. Morgan says the current cost of living crisis due to
the impact from inflation will hit European general retail
companies in the second half of 2022    
    ** The broker expects solid spend in some areas to
deteriorate rapidly in H2 as the "catch-up" effect wanes and
impacts on disposable income start to bite more acutely
    ** "With earnings momentum set to remain a greater driver of
near term sector performance than potential longer term
valuation, we therefore remain cautious across our entire
coverage with few exceptions," it adds
    ** JPM says significant cracks emerge in discretionary
spending with at least 15 European retail profit warnings in May
    ** The brokerage downgrades About You  YOUG.DE , Asos
 ASOS.L , ABF  ABF.L  and boohoo  BOOH.L  to "neutral" from
"overweight" 
    ** JPM says food & fuel spending is expected to rise to 26%
in 2022 from 20% in 2019 as inflation bites 

    

 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))