Bernstein analyst Brendan Luecke initiates coverage of several industrial stocks.
- The analyst started the U.S. multi-industry and electrical equipment sector "at a time of great uncertainty." He sees supply chain disruptions threatening revenue forecasts and inflation pressuring margins but believes "all of this is transitory."
- The analyst initiated Emerson Electric Co (NYSE:EMR) with a Market Perform rating and a price target of $100, implying an upside of 3.6%.
- Luecke says Emerson Electric is "a great firm that got stuck in oily end markets" as 25% of today's revenues are from oil & gas, and this could become an "enduring top-line problem" if decarbonization comes quickly.
- Investors expecting rapid, near-term decarbonization should consider selling into strength as Emerson benefits from a recovery in its long-cycle automation end markets, added the analyst.
- The analyst initiated Rockwell Automation Inc (NYSE:ROK) with an Outperform rating and a price target of $378, implying an upside of 13%.
- Luecke says "historically strong" fiscal 2021 backlog numbers, in conjunction with a "sound" growth strategy, give confidence that Rockwell will deliver "sustainably higher growth numbers after the current upcycle."
- The analyst initiated Roper Technologies Inc (NYSE:ROP) with a Market Perform rating and a price target of $505, implying an upside of 9.5%.
- The analyst believes Roper offers an outstanding sustainable compounding story. However, he sees risk around acquisition multiples.
- The analyst initiated IDEX Corp (NYSE:IEX) with a Market Perform rating and a price target of $230, implying an upside of 1.9%.
- The analyst believes it offers an outstanding sustainable compounding story but sees risk around the deal volume.
- The analyst initiated 3M Co (NYSE:MMM) with a Market Perform rating and a price target of $175, implying a downside of 2.5%.
- The analyst initiated General Electric Co (NYSE:GE) with an Outperform rating and a price target of $120, implying an upside of 17.3%.
- Price Action: EMR shares are trading higher by 1.27% at $96.51, ROK by 1.34% at $334.58, ROP by 1.68% at $461.23, IEX by 0.50% at $225.97, MMM by 1.14% at $179.41 and GE by 2.86% at $102.25 on the last check Tuesday.
