JPM returns preference for European over US banks
** J.P.Morgan maintains its constructive view on European lenders, seeing the sector "still in the sweetspot" for a re-rating, and returns its preference for European over U.S. banks
** The brokerage expects the sector's 2027 implied cost of equity, a measure of risk, to decline towards 10% from 11.5%, indicating potential for 15% upside
** The re-rating expectation is based on the banks' material valuation discount, strong capital positions, and "healthy" pre-provision operating profit growth, JPM says
** JPM notes bank managements are showing discipline with "sensible loan growth" and "excellent capital management" optimizing buybacks over acquisitions
** Among German lenders, it cuts Commerzbank CBKG.DE to "neutral" from "overweight", seeing the stock as fairly valued, and places Deutsche Bank DBKGn.DE on positive catalyst watch
** In Iberia, it moves BCP BCP.LS to "neutral" from "overweight"
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