From Financial Modeling Prep: 2024-12-17 10:27:18

Morgan Stanley upgrades machinery sector rating to “attractive” for 2025, citing improved clarity on equipment cycles and economic trends under Trump administration. Key drivers include North American commercial vehicles, select stock valuations, and potential political impacts like trade uncertainties.

CNH Industrial and Timken Company receive “overweight” ratings with raised price targets. Identified as “value” plays with growth potential in improving market dynamics. Other notable calls include reaffirmed ratings on Cummins, Paccar, Wabtec, Deere, and Martin Marietta, while maintaining an “underweight” stance on Caterpillar, Terex, Lincoln Electric, and Donaldson.

Morgan Stanley sees U.S.-focused rental equipment firms and aggregates players as winners under potential Trump policies. United Rentals, Martin Marietta, and Vulcan are highlighted for domestic sales exposure and pricing power. Risks include geopolitical uncertainty, macro trends, and weakness in global demand for construction equipment.

Overall, Morgan Stanley’s upgraded outlook for the machinery sector in 2025 is cautiously optimistic, with strategic opportunities in commercial vehicles, agricultural equipment, and U.S.-focused companies. While risks tied to macroeconomic trends and policy uncertainty persist, selective plays like CNH, Timken, and rental equipment firms offer strong growth potential.



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