下面是小编为大家整理的美国电子设备与多产业2020年Q4预览：这会是一个增长低谷季度么【优秀范文】,供大家参考。
Global Research
10 January 2020
US Electrical Equipment & Multi-Industry 4Q Preview: Will this be the trough growth quarter?
How to position? Buy transformation stories and growth pockets
Following our recent sector initiation (link), we see three characteristics that will most likely generate value in our sector into 2020: 1) Transformations, 2) Deal Activity and 3) Idiosyncratic growth drivers. In that light, we buy turnaround stories (GE: link), deal activity (IR: link) and specific company & end-market growth dynamics (SWK: link). We have Sell ratings on companies with challenges to their business model (3M) and in slowing end markets (HVAC: JCI, LII). In this note we provide detailed commentary on our quarterly outlook for our covered companies. LSD organic growth in 2020, driven by industrial production and minimal capex For 2020 we expect tepid growth of ~2.5% (H2 better than H1) vs cons ~2%, almost entirely driven by IP alone. We already see incremental growth stabilising and inventory levels adjusting from elevated levels in EMEA & APAC whilst the US remains a weak spot as sales momentum continued down in Q3 and inventory levels remain elevated. This may need to be digested before we turn more positive, given EEMI"s average 50%+ U.S. sales exposure. Incremental data points on a knife edge suggest better growth in H2 2020 Early signs of growth have started to turn upward, but it is unclear if this is sustainable. Leading indicators recently inflected positively for the first time since 1Q18, which typically leads rel. sector performance by ~6 months. However, we wait to see if this is temporary or if it shows up in hard data (IP, capex) to become more constructive. Expectations for the sector have largely adjusted to more moderate growth, with consensus earnings momentum collapsing in H2 2019 and rel. NTM P/E now ~1 SDEV below the LT average. If incremental data continues this trend we see the potential for a rotation towards more cyclical exposure into H2 and an overall relative sector re- rating. For the full year we remain cautiously optimistic with ~2.5% growth on average (H2 > H1). Markus Mittermaier Analyst markus.mittermaier@ubs.com
+1-212-713 2716 Damian Karas, CFA Analyst damian.karas@ubs.com
+1-212-713 2267 Neal Burk Associate Analyst
neal.burk@ubs.com
+1-212-713 4066 Nicholas Amicucci, CFA, CPA Associate Analyst nicholas.amicucci@ubs.com
+1-212-882 5036
Figure 1: We project Q4 2019 to be the bottom in terms of organic growth. H2>H1 2020 given easier comps and bottoming macro data (please refer to our recent initiation for further details on our sector view: link).
12%
11%
10%
9%
8%
7%
6%
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3%
2%
1%
0%
-1%
-2%
-3%
US EEMI organic growth (average) US EEMI organic growth (average, UBSe)
Source: Factset, Company Reports, UBSe
www.ubs.com/investmentresearch
This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 51. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Industrial, Diversified Americas Equities 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19E
1Q20E
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Contents Links to our latest research ............................................... 3 Macro/Sector Backdrop .................................................... 4 Sector growth driven by IP in the midterm; minimal contribution from capex .................................................................................................................... 4 Leading indicators suggest IP turning less negative ...................................... 5 December ISM data suggests continuing U.S. weakness ................................ 6 UBS EEMI China Barometer ............................................................................ 6 Inventory may need to be digested before we become more positive on sector performance ..................................................................................... 7 Who can grow in this environment in 2020? ............................................... 8 Company pages ......................................................... 9
3M (Sell, $160 PT) ..................................................................................... 10 Cognex (Neutral, $52 PT) .......................................................................... 12 Crane (Buy, $105 PT) ................................................................................ 14 Eaton (Neutral, $98 PT) ............................................................................. 16 Emerson (Neutral, $78 PT) ........................................................................ 18 Gardner Denver (Neutral, $38 PT) ............................................................. 20 Gates Industrial Corporation Plc (Neutral, $14 PT) ..................................... 22 General Electric (Buy, $14 PT) ....................................................................... 24 Honeywell (Neutral, $192 PT) .................................................................... 30 Ingersoll-Rand (Buy, $150 PT) ....................................................................... 32 ITT (Neutral, $72 PT) ................................................................................. 34 Johnson Controls (Sell, $40 PT) ................................................................. 36 Lennox (Sell, $235 PT)............................................................................... 38 Pentair (Neutral, $42 PT) ........................................................................... 40 Rockwell Automation (Neutral, $206 PT) ................................................... 42 SiteOne (Neutral, $92 PT) .......................................................................... 44 SPXC (Neutral, $56 PT) ................................................................................. 46 Stanley Black & Decker (Buy, $200 PT) ...................................................... 48 Markus Mittermaier Analyst markus.mittermaier@ubs.com
+1-212-713 2716 Damian Karas, CFA Analyst damian.karas@ubs.com
+1-212-713 2267 Neal Burk Associate Analyst
neal.burk@ubs.com
+1-212-713 4066 Nicholas Amicucci, CFA, CPA Associate Analyst nicholas.amicucci@ubs.com
+1-212-882 5036
Links to our latest research Buy ratings
General Electric Co "A fresh look: Turnaround masterclass or dead cat ..." I ni t i a t i on o f
C ov e r a g e : S t a nl e y
Bl a c k & D e c k e r I n c
" S t rong T & S
gro w t h ... " Initiation of Coverage: Ingersoll-Rand PLC "All Aboard this Trane ... "
Sell ratings
3M Company "3Cs at 3M: We are cautious in light of 3 challenges in 2020: ..."
Initiation of Coverage: Johnson Controls International plc "Improving ... "
Sector/Thematic Pieces
Sector initiation: Initiation of Coverage: Electrical Equipment & Multi-Industry "Incremental ..." Post-launch feedback
Initiation of Coverage: US Electrical Equipment & Multi-Industry "HVAC ... " P F A S
I nv e s t or G ui d e
"H o w
m a t e r i a l
c oul d P F A S
b e
f or i ndus t r i a l s ? "
PFAS Conference Call– what could be the impact on our sector? (replay available upon request: markus.mittermaier@ubs.com)
Neutral Ratings
Initiation of Coverage: Honeywell International Inc "A Quantum Leap in ... " I n it ia t io n o f
C o ve r a g e : E a t on C orpor a t i on P L C
" P u t s
& t a k e s : E l e ctr ic a l s
... " Initiation of Coverage: Rockwell Automation Inc "Premier Automation play… " Initiation of Coverage: Emerson Electric Co "When will project funnel orders .."
Initiation of Coverage: Cognex Corp "Machine vision leader with strong ... "
Substantial Stock Re-rating Warrants a Pause, as Non-res also Slowing; Downgrade to Neutral
We would like to thank Pratap Singh , our research support service professional, for
assisting in preparing this research material.
9%
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-- 3%) 6%) 9%) 2%) 3% 6% 6% 5%
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(2%) 2%) (0%) 3% 1% 2% 2% (11 1 % % % ) 1% 3% 2% 1%
2%
(3%) (7%) (5%) Macro/Sector Backdrop Sector growth driven by IP in the midterm; minimal contribution from capex
Figure 2: We view EEMI organic growth as being driven by capex and Industrial Production. Our proprietary model implies muted EEMI sector growth in 2020 driven by IP, not capex
12%
Growth drivers: capex + IP UBS Proprietary capex + IP Predictor model tightly fits with actual EEMI sector org. growth We expect LSD sector organic growth for 2020, driven by capex.
(
(
(
(1 (15%)
Capex Contribution to EEMI Sector Growth IP Contribution to EEMI Sector Growth Organic sector growth (UBSe) US EEMI Organic sector growth (UBSe) Large caps only
Source: UBS Global Industrials Capex Model, Company data, Datastream
Figure 3: Acceleration/Deceleration in macro data (e.g., the OECD leading indicator index) typically leads relative Industrials performance by 6 months
Inflections in the OECD Leading 1.4%
1.2%
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-0.2% -0.4% -0.6% -0.8%
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 OECD Leading Indicator Index (2nd derivative, advanced 6m, L) Industrials vs S&P 500 (y/y, R) 25%
20%
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-10% -15% indicator index have been a reliable leading indicator for Industrial sector performance. We are at an inflection point with incremental data points just starting to improve, after having fallen since 2018. If this trend continues, history would suggest that within ~6 months the EEMI sector should become an outperformer.
Source: Factset, OECD, UBS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e
Leading indicators suggest IP turning less negative
Figure 4: OECD leading indicator helps foresee changes in Global IP with ca. 3 month lead time…
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