JPM picks PZU as top defensive to coronavirus among Poland/CEE non-banks

Richter Gedeon Vegyeszeti Gyar Nyrt

05/03/2020 09:47

** JP Morgan weighs in on the sensitivity of Polish and
Central European stocks under its coverage to coronavirus impact
    ** The brokerage names Polish insurer PZU  PZU.WA  as its
top defensive pick, raising its rating to "overweight" from
"neutral"
    ** It sees PZU results as insulated from markets volatility
thanks to lower corporate debt and equity mix of 25% versus 41%
sector average
    ** JPM cuts Hungarian drugmaker Richter  GDRB.BU  to
"neutral" from "overweight" given the stock is not 100% immune
from possible China supply chain risks
    ** The brokerage says Polish consumer staples Dino  DNP.WA 
and Eurocash  EUR.WA  are safer than discretionary retailers CCC
 CCCP.WA  and LPP  LPPP.WA  as the latter source about 30% of
supplies from Chinese factories
    ** JPM keeps "overweight" on LPP on strong balance sheet,
and "underweight" on CCC
    ** Dino and Eurocash are likely to post strong Q1 LFLs on
coronavirus prep buying, JPM says and upgrades Eurocash to
"neutral" as sees the stocks as fairly valued

 ((karl.badohal@thomsonreuters.com))