Investing.com -- Morgan Stanley is bullish on machinery industry, raising sector rating to “attractive” for 2025, given the improved clarity on key equipment cycles.
Brokerage upgraded CNH Industrial NV (NYSE: CNH ), and Timken Company (NYSE: TKR ) to “overweight,” favouring these "value" plays for their de-risked profiles. Lifts target price on CNH to $16.5 from $11, while bumps Timken’s by $11 to $93.
MS said three themes will be driving 2025 performance, which includes equipment cycle positioning, valuations, and potential impacts of a Trump presidency. It prefers North American commercial vehicles and agricultural equipment, while construction equipment remains the most challenged.
Morgan Stanley (NYSE: MS ) kept Cummins (NYSE: CMI ), Paccar (NASDAQ: PCAR ), Wabtec, Deere (NYSE: DE ), and Martin Marietta at “overweight,” while staying “underweight” on Caterpillar (NYSE: CAT ), Terex (NYSE: TEX ), Lincoln Electric, and Donaldson.
The note also flagged macro and geopolitical risks tied to a Trump presidency, including trade uncertainty, inflation, and a strong U.S. dollar. However, Morgan Stanley sees rental equipment firms like United Rentals (NYSE: URI ) and WSC and aggregates players Martin Marietta and Vulcan as well-positioned under Trump, given their U.S.-focused sales and pricing power.