Morgan Stanley has issued a report on several leading companies in the power equipment and automation sector, specifically Legrand, Siemens, ABB, and Atlas Copco. The investment bank has expressed its stance on each company ahead of their Q1 earnings results.
Legrand and Siemens have received a thumbs-up from Morgan Stanley, with the bank upgrading its target price for Legrand to €45.50 from €42.10. The bank believes that Legrand’s recent operational improvement and its focus on the growth segments are likely to drive its financial performance. Similarly, Morgan Stanley has maintained its “overweight” rating on Siemens, citing the company’s strong order book and potential for margin expansion.
On the other hand, Morgan Stanley is taking a cautious approach towards ABB and Atlas Copco. The bank has downgraded its target price for ABB to CHF 24.50 from CHF 26.10, citing concerns over the company’s high valuation and the risks associated with its Power Grids business. Morgan Stanley believes that ABB’s growth prospects are limited, and the company may struggle to deliver sustainable profitability.
As for Atlas Copco, Morgan Stanley has maintained its “underweight” rating, stating that the company’s growth prospects are uncertain and its valuation is rich. The bank believes that Atlas Copco’s high-end compressed air and industrial automation businesses may face headwinds, which could impact its financial performance.
The bank’s report highlights the varying fortunes of these companies, with Legrand and Siemens expected to deliver strong performances driven by their focus on growth segments and operational improvements. On the other hand, ABB and Atlas Copco face challenges in terms of high valuations, uncertain growth prospects, and operational risks.
Investors are likely to be keenly watching the Q1 earnings results of these companies, with Morgan Stanley’s report providing a valuable insight into the bank’s expectations and outlook. The report suggests that Legrand and Siemens are likely to outperform the market, while ABB and Atlas Copco may struggle to deliver sustainable profitability. As the Q1 earnings season unfolds, investors will be looking for guidance on the outlook for the power equipment and automation sector, and Morgan Stanley’s report provides a useful guide to the potential outcomes.