JPM sticks to its favoured European capital goods names amid muted sentiment
** J.P.Morgan says European capital goods are "stuck in the middle", with investor conviction generally low and valuations in the middle ground, as it sticks to its favoured names for whom consensus seems "at least reasonable"
** "Weaker top-down indicators have dampened cyclical enthusiasm but the backdrop is ‘slower’ rather than outright ‘bad’, and therefore not enough to push us decisively more defensive," JPM says
** It adds the combination of improved sector composition and relatively more attractive growth opportunities justifies the current 30% premium to the market, though it remains selective on individual stocks
** It prefers Alstom ALSO.PA, IMI <IMI.L>, Kion KGX.DE, Knorr-Bremse KGX.DE, Prysmian PRY.MI, Rotork ROR.L and Schneider <SCHN.PA>, while avoiding Alfa Laval ALFA.ST and Siemens Energy ENR1n.DE
** It upgrades Legrand LEGD.PA and Rotork ROR.L to "overweight" and Epiroc EPIRa.ST to "neutral", citing recovery potential
** It places Kone KNEBV.HE and Signify LIGHT.AS, both rated "overweight", to its positive catalyst watch, pointing to the former's upcoming CMD and the latter's cost reduction plan that should help its Q3 results
Reporting by Gianluca Lo Nostro
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
