Barclays on U.S. Multi-Industry: Mid-Quarter Update & Thoughts Post Management Meetings
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Price: $482.33 --0%
Rating Summary:
17 Buy, 28 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 18 | New: 12
Rating Summary:
17 Buy, 28 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 14 | Down: 18 | New: 12
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Barclays on U.S. Multi-Industry: Mid-Quarter Update & Thoughts Post Management Meetings
Analyst, Scott R. Davis, said, "We've met with a large cross-section of industrial companies lately. Overall, we've been surprised by the resilience within industrial end-markets. Companies are citing November as better than October, which was better than September. Overall 4Q appears to be tracking modestly better than guidance and expectations. Early read on 1Q12 order books and backlogs appear to be up ~5% y-o-y."
"So where is the strength coming from? The U.S. mostly, with Europe not yet the headwind most expect. Emerging Markets largely remain steady at high levels with particular strength in resource based countries (Africa, Middle-East). China PMI numbers indicate material slowing but most of our companies haven't seen a big impact yet. As for specific end-markets, factory investment remains strong (i.e., Rockwell Automation (NYSE: ROK), Emerson (NYSE: EMR)), retrofit markets remain strong (lighting, environmental), anything industrial spend related is positively surprising (C&I loans up 10% is a good sign)."
"Any change to our views? We have a higher conviction level in our bullish call on core Electrical names, notably Cooper (NYSE: CBE), SPX (NYSE: SPW), Hubbell (NYSE: HUB-B), Thomas & Betts Corp. (NYSE: TNB), and WESCO (NYSE: WCC). On the larger cap side we have higher conviction level in Honeywell (NYSE: HON) and ROK. We favor anything with exposure to factory spend, utility spend, and commercial retrofit or construction markets. Share gainers like WW Grainger (NYSE: GWW) and MSC Industrial (NYSE: MSM) have been great stories. Post the big rally, we find about half of the group interesting, the other half not. We acknowledge worsening data in international end-markets, notably Europe and China. Valuations remain reasonable, particularly on cash based metrics, and about 1-2 P/E multiple points below normal."
Analyst, Scott R. Davis, said, "We've met with a large cross-section of industrial companies lately. Overall, we've been surprised by the resilience within industrial end-markets. Companies are citing November as better than October, which was better than September. Overall 4Q appears to be tracking modestly better than guidance and expectations. Early read on 1Q12 order books and backlogs appear to be up ~5% y-o-y."
"So where is the strength coming from? The U.S. mostly, with Europe not yet the headwind most expect. Emerging Markets largely remain steady at high levels with particular strength in resource based countries (Africa, Middle-East). China PMI numbers indicate material slowing but most of our companies haven't seen a big impact yet. As for specific end-markets, factory investment remains strong (i.e., Rockwell Automation (NYSE: ROK), Emerson (NYSE: EMR)), retrofit markets remain strong (lighting, environmental), anything industrial spend related is positively surprising (C&I loans up 10% is a good sign)."
"Any change to our views? We have a higher conviction level in our bullish call on core Electrical names, notably Cooper (NYSE: CBE), SPX (NYSE: SPW), Hubbell (NYSE: HUB-B), Thomas & Betts Corp. (NYSE: TNB), and WESCO (NYSE: WCC). On the larger cap side we have higher conviction level in Honeywell (NYSE: HON) and ROK. We favor anything with exposure to factory spend, utility spend, and commercial retrofit or construction markets. Share gainers like WW Grainger (NYSE: GWW) and MSC Industrial (NYSE: MSM) have been great stories. Post the big rally, we find about half of the group interesting, the other half not. We acknowledge worsening data in international end-markets, notably Europe and China. Valuations remain reasonable, particularly on cash based metrics, and about 1-2 P/E multiple points below normal."
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