'Still upside, despite the risks' for European industrials sector - Berenberg
17/01/2022 09:57
** Capital goods stocks may struggle to match the high bar
set in 2021 this year, Berenberg says, but should still be
capable of low-double-digit returns on average
** Strong economic growth, combined with easing cost
headwinds, especially in H2, should drive earnings up by around
11% on average, it says
** The brokerage points to the risks as well, especially
regarding China and supply chain disruptions, but adds these
"should be manageable"
** In the short term, it thinks China risks are elevated,
mainly due to instability in the real estate sector urn:newsml:reuters.com:*:nL1N2TT060
** However, it does not view the risk as systemic as it sees
policy response will help to stabilise the market by H2
** The broker expects supply chains disruptions to start
easing and semiconductor demand to continue to outstrip supply
in 2022
** Berenberg highlights four "buy"-rated stocks which may
outperform over the next 12 months: lockmaker Assa Abloy
ASSAb.ST , engineering and technology company Siemens
SIEGn.DE , industrial machinery group Aalberts AALB.AS and
kitchen appliance manufacturer Rational RAAG.DE
(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))