Read-across from US banks 3Q: strong results with unconvincing messaging on earnings sustainability – prefer cheaper European Banks at 8.7x P/E 2028E

US banks' 3Q results were strong, but messaging from the earnings calls was unconvincing with respect to the sustainability of the revenue dynamics related to AI super cycle growth as well as the impact from higher interest rates for longer. In addition, US banks' strong B/ST growth is starting to be questioned, with focus on CIB B/ST expansion which we think should be valued at a lower PE multiple than capital-light CIB flow businesses. Hence we reaffirm our preference for European Banks over US as the valuation gap was too wide even after accounting for the superior franchise of US players. US banks delivered very strong Equities Sales & Trading performance (+43% YoY) with a more mixed FICC picture (-4% YoY) while IB fee performance (+8% YoY) was solid;