** UBS favours structurally growing industries for European
capital goods as it expects potential recovery to be witnessed
especially from Q2 onwards
    ** "Into 2021, we believe investors will need to balance
companies with attractive exposures to growing industries
(renewables, railway, robotics, IoT, software…) with market
sentiment, valuations & bottom-up catalysts," UBS says
    ** Brokerage sees Q4 organic revenues for the sector
declining by 5%, followed by a 5% growth in Q1 2021    
    ** It maintains a positive stance on the sector and
reiterates preference for a mixed set of quality and cyclical
stocks
    ** UBS says key stocks to watch into Q4 include Swiss ABB
 ABBN.S  ("buy") , Austrian Andritz  ANDR.VI  ("buy"), German
Kion ("buy')  KGX.DE , Knorr-Bremse  KBX.DE  ("buy"), Krones
 KRNG.DE  ("buy"), and Rheinmetall  RHMG.DE  ("buy")
    ** For ABB it sees a healthy Q4 followed by a more vital
2021 
    ** The broker also favours a Sweden-based Assa Abloy
 ASSAb.ST  ("buy"), says negative sentiment and low expectations
should meet good execution in 2021
    ** UBS recommends avoiding Finland's engineering company
Kone  KNEBV.HE  ("sell") as it sees recent strength during 2020
evolving into weaker-than-expected 2021
    

 ((Tommyalexander.lund@thomsonreuters.com))