Electrical Equipment & Multi-Industry

We conclude that a strong Industrial cycle will continue to unfold over the next several years. It could be delayed or subdued by cyclical forces during 2023, but it won’t be denied. There is too much momentum around numerous secular forces and stimulus. Said differently, we believe we are early in what could be a multi-year period of Industrial expansion, although a brief intermission that may be labeled a recession is certainly possible, if not likely. Industrial activity has been largely subdued since the energy crash of 2014/15 that was followed by the tariff regime and COVID. Now we have Infrastructure stimulus in the pipeline, a re-balancing of global supply chains, near/reshoring and clear secular drivers around electrification and energy efficiency. Labor costs and labor availability also support investments in capital to displace labor. We do see near-term downside risk to shares given valuations, but would look to add to exposures broadly on any pull back. We suspect early 2023 will provide better entry points.

Top Picks:

  • Parker Hannifin (PH)
  • Johnson Controls, Inc. (JCI)

Vertical Team

Jeffrey T. Sprague
Managing Partner

Nick Lipinski
Vice President | Electrical Equipment & Multi-Industry

Jeremy A. Ziobron
Analyst | Electrical Equipment & Multi-Industry

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