U.S. markets closed
  • S&P 500

    3,819.72
    -50.57 (-1.31%)
     
  • Dow 30

    31,270.09
    -121.43 (-0.39%)
     
  • Nasdaq

    12,997.75
    -361.04 (-2.70%)
     
  • Russell 2000

    2,207.79
    -23.72 (-1.06%)
     
  • Crude Oil

    61.06
    +1.31 (+2.19%)
     
  • Gold

    1,709.30
    -24.30 (-1.40%)
     
  • Silver

    26.18
    -0.70 (-2.60%)
     
  • EUR/USD

    1.2067
    -0.0020 (-0.17%)
     
  • 10-Yr Bond

    1.4700
    +0.0550 (+3.89%)
     
  • GBP/USD

    1.3952
    -0.0004 (-0.03%)
     
  • USD/JPY

    107.0000
    +0.2900 (+0.27%)
     
  • BTC-USD

    50,787.23
    +3,226.24 (+6.78%)
     
  • CMC Crypto 200

    1,016.12
    +28.03 (+2.84%)
     
  • FTSE 100

    6,675.47
    +61.72 (+0.93%)
     
  • Nikkei 225

    29,559.10
    +150.93 (+0.51%)
     

BofA Issues 2 Industrial Upgrades, 2 Downgrades As Coronavirus Narrative Shifts

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Wayne Duggan
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Encouraging news on the Pfizer Inc. (NYSE: PFE) coronavirus vaccine candidate has changed the narrative related to the global pandemic, and BofA Securities said Wednesday that it has changed the investment theses for a handful of industrial stocks as well.

The Industrials Analyst: Andrew Obin issued the following industrial stock ratings changes:

  • Eaton Corporation PLC (NYSE: ETN) upgraded from Neutral to Buy, price target raised from $125 to $135.

  • Allegion PLC (NYSE: ALLE) upgraded from Neutral to Buy, price target raised from $118 to $128.

  • Trane Technologies PLC (NYSE: TT) downgraded from Buy to Underperform, price target reiterated at $155.

  • Pentair PLC (NYSE: PNR) downgraded from Buy to Underperform, price target reiterated at $58.

Related Link: Boeing Option Trader Bets M On 10% More Upside

The Industrials Thesis: It will take some time for industrial production to return to pre-pandemic levels, but now is the time to start investing in a rebound, Obin said in a Wednesday note. 

“We believe multi-industrials investors will shift capital from COVID beneficiaries to stocks with the potential to benefit from a return to normal,” the analyst said.

Seventy-five percent of Eaton’s end markets are already up compared to a year ago, and the vaccine progress is bullish for Eaton’s aerospace business, he said.

A lackluster non-residential construction market has weighed on Allegion in 2020, but Obin said those trends should improve significantly in coming quarters given the close correlation between GDP growth and non-residential construction.

At the same time, the tailwind social distancing created for Trane’s HVAC business may soon be running out of steam, the analyst said.

The same can be said for Pentair’s pool business, which he said has been a major beneficiary of the stay-at-home environment.

Benzinga’s Take: The same shift from social distancing stocks to “return to normalcy” stocks has been playing out in different sectors throughout the market, and the industrial sector is no exception.

The key question for investors moving forward is when — and if —individual businesses will recover to their pre-pandemic levels.

Latest Ratings for ETN

Nov 2020

B of A Securities

Upgrades

Neutral

Buy

Nov 2020

Deutsche Bank

Maintains

Buy

Nov 2020

Credit Suisse

Maintains

Outperform

View More Analyst Ratings for ETN
View the Latest Analyst Ratings

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.