Morgan Stanley: European corporate earnings are resilient to rising natural gas prices

Morgan Stanley strategists say the hit to European corporate earnings from rising natural gas prices may be smaller than investors expect. Compared with the 2022 energy crisis, companies are less sensitive to energy and better prepared to cope. A research team led by Marina Zavolock wrote that sectors accounting for 36% of MSCI Europe index earnings will see upside risk from higher energy prices, while only 6% face moderate downward pressure on earnings. Energy, utilities and banking are listed as the main beneficiary sectors. The bank expects TTF natural gas to average 85 euros per megawatt-hour this winter, with prices potentially exceeding 100 euros per megawatt-hour; if Qatari supply disruptions persist and winter temperatures are low, the price increase will be even larger.