As inflation slows, Europe Inc must show off its margin might

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European companies haven't had such a low bar to clear in terms of earnings expectations in years, not least because of the highly complex geopolitical and macroeconomic backdrop, yet investors may only reward those that can protect their margins.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

22 Jan 2024

Shortly after Vladimir Putin ordered the invasion of Ukraine in 2022, the US banned all imports of Russian oil, liquefied natural gas and coal.

But not all energy supplies were included in the US sanctions, nor in those of its European allies. On the contrary, western powers have taken care not to interrupt the flow of raw materials and services from Russia’s state-owned nuclear giant Rosatom and its subsidiary Tenex.

Moscow’s invasion exposed many vulnerabilities in US and European energy supplies, not least in the nuclear sector, where more than a fifth of the enriched uranium fuel required to power both regions’ nuclear fleets comes from Russia.

For the US energy sector, it was a call to action. Utilities companies have spent two years stockpiling nuclear fuel in case Russian supplies are disrupted.