CoTD: Sustained Cycle Momentum But Equities Need Revisions

Morgan Stanley maintains an attractive view on US Industrials, driven by sustained cyclical momentum and secular US reshoring trends. However, with valuations at historic highs, future equity gains require positive earnings revisions for the second half of the year.

Key Takeaways

• 1.US industrial activity shows sustained momentum, but current equity valuations reflect a high bar for future growth, necessitating positive forward revisions.
• 2.US Reshoring is a key driver for the short-cycle industrial upcycle, shifting production into the US market to mitigate tariff and supply chain risks.
• 3.The firm favors Industrial over Consumer exposure, specifically targeting companies involved in constructing and serving facilities.

Table of Contents

• CoTD: Sustained Cycle Momentum But Equities Need Revisions
• Disclosure Section
• Analyst Certification
• Global Research Conflict Management Policy
• Important Regulatory Disclosures on Subject Companies
• STOCK RATINGS
• Global Stock Ratings Distribution
• Analyst Stock Ratings
• Analyst Industry Views
• Important Disclosures for Morgan Stanley Smith Barney LLC Customers
• Other Important Disclosures

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