EFTA00661245.pdf

From: "Barrett, Paul S" < To: Undisclosed recipients:; Subject: SX5E Div Update: Soc Gen Eliminates 2012 Dividend Date: Tue, 08 Nov 2011 14:51:22 +0000 Attachments: Euro Stoxx _ 50 _dividend_analysis_08nov 1 I.xls Inline-Images: Euro_Stoxx_50_dividend_analysis_08nov11(1).xls Euro STOXX 50 Bottom-up Dividend Valuation Soc Gen plans to not pay a dividend in 2012. Prior to today's announcement, Soc Gen was expected to contribute —2 points to 2012 dividends and - 2.5 points to 2013 dividends. Most other banks have reported already (namely Santander) but Telefonica reports on Friday and at 9-10% of dividend expectations is worth keeping an eye on even if it isn't a bank. The linked spreadsheet contains a bottom-up analysis of Euro STOXX 50 dividends for 2011-2014, incorporating Societe Generale's announcement this morning that it will not pay a dividend in 2012. Following lberdrola's announcement that its interim dividend will be paid in January and Unilever's announcement of its 3`cl interim dividend last week, all 2011 expected dividends have now been confirmed. In the spreadsheet, any cells shaded in light blue can be changed in order to perform a scenario analysis, by altering expectations for a single company or sector. Each sheet in the workbook contains a separate set of estimates: Bloomberg consensus, I/B/E/S, J .P. Morgan Research, and Consensus Bear (which aggregates the lowest dividend forecast among the Bloomberg consensus for each company). BEst 160 - IBES 150 - —6— JPM Malyst 140 - o Consensus Bear --c—• Dividend Future 130 - 120 - 110 - a a a 100 - 90 - 80 - Implied vs. consensus and JPM ests. 70 2010 2011 2012 2013 2014 Upside ! downside potential 2011 2012 2013 2014 BEst 12.5% 46.2% 64.4% IBES 13.6% 47.1% 66.5% JPM 11.8% 41.7% 65.4% Consensus Bear -6.4% 16.6% 21.8% Source: Equity Derivatives Strategy, Bloomberg, Dotostreom I've added what out financials (banks and insurance) would be and there's still upside to 2013 dividends. Bottom-Up Estimates 2012 2013 2014 BEst 122.7 133.9 141.7 IBES 123.9 134.8 143.5 JPM Analyst 122.0 129.8 142.6 Consensus Bear 102.1 106.8 105.0 Dividend Future 109.1 91.6 86.2 EFTA00661245  Financials(IBES) 93A 98A 103.6 Paul Barrett, CFA Managing Director Global Investment Opportunities Group JPMorgan Private Bank NY 10019 This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://wwwjpmorgan.corn/pages/disclosures/email. EFTA00661246