J.P. Morgan Places Campari, Magnum on Positive Watch on Favorable Weather Outlook

J.P. Morgan has placed beverage maker Campari and The Magnum Ice Cream Company on a "Positive Catalyst Watch," anticipating that favorable weather could boost sales ahead of the European consumer staples sector's first-half 2026 reporting season. In the same Wednesday note, the bank placed Nivea-owner Beiersdorf on a "Negative Catalyst Watch," citing risks of potential guidance downgrades.

Weather-Driven Upside Seen

Analysts at the bank believe both Campari and Magnum face upside risks to their European like-for-like sales figures, which could reassure investors about their full-year performance. Both companies currently hold a "Neutral" rating from J.P. Morgan.

For Campari, the bank forecasts 2% organic sales growth in the second quarter to €860 million. Favorable weather in Italy, which constitutes about 15% of sales, is expected to support revenue and margins through higher demand for aperitifs. J.P. Morgan also noted potential tariff refunds that could be equivalent to 2%-3% of the company's full-year 2026 EBIT.

For The Magnum Ice Cream Company, J.P. Morgan projects second-quarter like-for-like sales growth of 2.6%, driven by both volume and pricing. The bank's estimates for Magnum's first-half 2026 margin and earnings per share are already ahead of consensus, with its EPS forecast standing 4% above the market average.

Beiersdorf Faces Headwinds

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In contrast, J.P. Morgan placed Beiersdorf on a Negative Catalyst Watch, suggesting that any benefit from stronger sun care sales will likely be offset by the risk of downgrades to its full-year 2026 sales and margin guidance.

The bank forecasts a 3.3% decline in Beiersdorf's second-quarter Consumer like-for-like sales, with weakness concentrated in Europe. For the full year, J.P. Morgan expects a group sales decline of 2.1% and a 100 basis point contraction in its EBIT margin to 13%, which is below the consensus estimate of 13.4%.

Sector Valuation Context

J.P. Morgan noted that the European staples sector has modestly outperformed the broader market since early June. This has pushed the sector's valuation to 19 times forward price-to-earnings, which is in line with its long-term average.

However, this valuation implies only a 20% premium to the broader market, significantly below the historical average premium of 44%, according to the bank's analysis.