This has been a rough quarter for the multi-industrial sector. Companies like 3M (MMM), Illinois Tool Works (ITW), Parker-Hannifin (PH), and Rockwell (ROK)
have their stocks take a hit despite earnings reports that haven’t been
all that bad. High valuations and expectations have certainly played a
role in this cycle, but I believe investors are also getting more
evidence that significant end-markets like autos, electronics, some
commercial vehicles, and parts of the “general industrial” category are
noticeably slowing.
I do have some of those concerns about Eaton (ETN),
and I would expect fading momentum in segments like Vehicle and
Hydraulics as the year goes on. On the other hand, Eaton’s exposure to
aerospace, commercial buildings, and sub-sectors like data centers and
harsh/hazardous environments should offer better results. All told,
expectations seem very low for Eaton and this might be a name to
consider if you’re still looking for some industrial exposure at this
later point in the cycle.
Read more here:
Eaton Not Getting Much Love At All
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