Emerging Markets Equity Strategy

Latest edition · September 11, 2026

JPM Emerging Markets

J.P. Morgan's 2Q26 Emerging Markets Earnings Dissector highlights that EM net income grew 80% YoY, driven primarily by an explosive +347% YoY surge in Technology across Korea and Taiwan alongside broadening cyclical strength in Energy, Industrials, and Materials. J.P. Morgan maintains an Overweight allocation to EM equities with a 12-month MXEF index target of 2,000.

The 2Q26 emerging market earnings season demonstrated exceptional fundamental strength, with aggregate net income increasing 80% YoY on 22% revenue growth and 44% EBITDA expansion. MSCI EM revision breadth turned positive in August 2026 for the first time since late 2025, buoyed by multi-quarter upward EPS revisions in Korea (+334% 2026E EPS growth) and Taiwan (+64% 2026E EPS growth). While the Tech and AI hardware ecosystem continues to drive the lion's share of profits, earnings have broadened into Industrials, Healthcare, and Energy, the latter supported by supply tightness and geopolitical disruption in the Strait of Hormuz. Despite tactical risks from generational bond yield highs and upcoming US mid-term elections, J.P. Morgan remains Overweight on EM equities with a 12-month base case MXEF target of 2,000, favoring Korea, Taiwan, China, South Africa, Poland, Greece, Chile, Peru, and Malaysia.

Key takeaways from the latest edition

• 1.EM delivered strong 2Q26 earnings growth, with net income surging 80% YoY, sales up 22% YoY, and EBITDA up 44% YoY, heavily powered by the Tech sector (+347% YoY) in Korea and Taiwan.
• 2.MSCI EM earnings revision breadth turned positive in August 2026 after eight months of contraction, with consensus 2026/27 EPS estimates upgraded by 11% and 15% over the prior three months.
• 3.Earnings strength is beginning to broaden from semiconductors into cyclicals such as Industrials, Healthcare, Materials, and Energy, while China remains a 'split-screen' economy led by AI/healthcare innovation amidst soft mass domestic demand.

What this series covers

• Emerging Markets Equity Strategy
• 2Q26 Earnings Dissector: Tech Still Leads on Earnings; Strength Broadens to Cyclicals
• Highlights from earnings reports
• Results Summary
• Change in Margins
• Dissection of EM Earnings Growth
• EPS Revisions at the stock level
• Earnings Revisions Breadth
• Companies Discussed in This Report

Edition archive

• JPM Emerging Markets

  September 11, 2026

• JPM Emerging Markets EQ

  July 30, 2026

• JPM Emerging Markets

  July 21, 2026