JPM sees a 'more balanced' H1 for European Staples
04/07/2024 11:28
** J.P.Morgan expects a "more balanced" H1 for European
staples
** Says risk of challenging demand environment and growth
threat from weakening pricing and worse forex market are
partially offset by better margin outcome and continued volumes
improvement
** Adds H1 may also highlight risks in the U.S. (spirits,
mass beauty, still weak foods) and China
** JPM says the sector looks oversold and sees opportunities
to buy into companies with better revenue delivery and margin
progression, such as brewers, household & personal care (HPC),
and ingredients
** Its "overweight" HPC picks are Beiersdorf BEIG.DE and
Reckitt Benckiser RKT.L
** It picks Unilever ULVR.L and Danone DANO.PA in food;
Symrise SY1G.DE (top pick) and Kerry Group KYGa.I among
ingredients
** Within brewers it picks Heineken HEIN.AS and
Anheuser-Busch Inbev ABI.BR , while Coca-Cola Europacific
Partners CCEPC.L is its pick in soft drinks
** It remains most cautious on spirits on risks of further
EPS downgrades, disappointing guidance from Diageo DGE.L ,
Pernod Ricard PERP.PA (both "neutral"-rated), and continues to
see risk in high China exposure names
(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))