JPM sticks to its favoured European capital goods names amid muted sentiment

Kion AG

11/09/2024 08:48

** 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)
((mailto:gianluca.lonostro@thomsonreuters.com;))