HSBC upbeat on European capital goods, favours exposure to US and China
05/12/2024 12:26
** HSBC sees a solid 2025 backdrop for European capital
goods, as falling interest rates and U.S.-led capex growth in
2025 boost the chances of a broader cyclical recovery
** It points to China finally showing signs of industrial
demand growth, and says the U.S., post elections, is arguably
the greatest driver of cyclical demand
** Because of this, it favours exposure to the U.S. and
China, and to demand growth in the electrification and
technology sector
** HSBC raises industrial bearings maker SKF SKFb.ST to
"buy" from "hold", saying short cycle recovery can drive a
re-rating and the planned automotive demerger should help lift
valuation
** It upgrades Germany's Siemens SIEGn.DE to "hold" from
"reduce", seeing the recent FY24 results as a clearing event,
leaving the stock with more limited scope for a downside
** Across its European coverage, HSBC has 12 "buy" ratings
and just three with "reduce", underscoring its upbeat view
(Reporting by Anastasiia Kozlova and Amir Orusov)
((Anastasiia.Kozlova@thomsonreuters.com;
Amir.Orusov@thomsonreuters.com))