Barclays says soft industrial demand to weigh on European capital goods in 2025

NKT A/S

04/12/2024 14:10

** Barclays expects 2025 to be another year of soft
industrial demand, with sales in European capital goods expected
to grow by about 3%, below historical averages of 5-6%
    ** It sees growth potential for electrification, marine and
gold mining, while predicting struggles for other industrials
due to moderate GDP growth, fading price benefits, high
inventory levels and trade tensions
    ** It forecasts average 2025 EBIT 5% below consensus
estimates for the sector
    ** It adds increased trade tensions increase risks to the
sector making more than a half of its sales in Europe and China
    ** In this environment, Barclays says it is "overweight" on
companies that show a combination of strong market growth, solid
business models and reasonable valuations
    ** It is less confident in stocks with overly optimistic
market expectations or those facing incremental business model
challenges in 2025
    
RATING CHANGES:
 COMPANY           RATING        OLD RATING    PT        OLD PT
 Epiroc            overweight    underweight   SEK 205   SEK 170
  EPIRa.ST                                               
 Spirax Group      overweight    equal weight  8,350p    7,750p
  SPX.L                                                  
 Schindler         overweight    equal weight  CHF 258   CHF 230
 Holding  SCHP.S                                         
 Ariston           equal weight  overweight    EUR 3.81  EUR 5
  ARIS.MI                                                
                   underweight   overweight    EUR 18    EUR 29
 Signify                                                 
  LIGHT.AS                                               
 Andritz           underweight   equal weight  EUR 40    EUR 50
  ANDR.VI                                                
 
 (Reporting by Vera Dvorakova)
 ((vera.dvorakova@thomsonreuters.com))