J.P. 摩根-美股-机械行业-2019年Q1美国机械行业盈利预览-2019.4.8-61页.pdf

North America Equity Research08 April 2019US MachineryQ119 Earnings PreviewMachineryAnn Duignan AC(1-212)622-Bloomberg JPMA DUIGNAN J.P.Morgan Securities LLCThomas Simonitsch(1-212)622-J.P.Morgan Securities LLCBhanu P Koduru(91-22)6157-J.P.Morgan India Private LimitedSee page 59 for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.Our Machinery coverage slightly outperformed the broader market in Q1(up 15%vs.the S&P 500 up 14%)as investors rotated back into interest-rate-sensitive stocks that underperformed in the back half of 2018.Additionally,Chinas Manufacturing PMI improved in March,suggesting a reacceleration,and investors believe that the Eurozone PMI will stabilize/improve in the near term,supporting the rotation into cyclicals.Beyond the macro,trade negotiations continue to add volatility to stocks,and the laggards in the group have been CAT and DE as the final resolution continues to get pushed out.Additionally,US dollar strength(especially vs.the Argentine peso and Brazilian real)is weighing on US agricultural exports,compounding the damage of Chinese counter-tariffs and adding to the growing list of headwinds for US farmers;we are incrementally more cautious on DE and CNHI going into a critical US planting season.We will co-host a call on Wednesday,April 17,at 10am ET with Steve Tusa and our colleagues in Europe and Japan;please contact us or your JPM salesperson for dial-in details.We remain bullish US construction;private non-residential and public spending growth under-appreciated.Total construction spending SAAR was up 1.0%MoM in February despite an upward revision to January spending.Private residential spending SAAR was up 0.7%MoM;private non-residential spending was down 0.5%MoM;and public spending SAAR was up 3.6%MoM,mainly driven by an increase in Highway&Street(up 9.5%).We remain Overweight construction-related stocks CAT,ETN,TEX and OSK.We are neutral truck and automotive;neutral/negative US agriculture.NA Class 8 orders are down 64%YTD as build slots for 2019 are mostly filled and order books for 2020 do not open until midyear,suggesting the industry will continue to build from the backlog;as such,Q1 margins should be strong for names such as PCAR,CMI,and ALSN.Global automotive forecasts were revised down again during Q1(though not a surprise);however,weaker auto builds may weigh on ITW.US farmer sentiment continues to deteriorate as commodity prices remain under pressure and recent weather extremes will likely complicate planting and may weigh on farmer spending later in the year;we remain cautious on DE and CNHI.Stock picks into Q1.We believe that construction OEMs CAT,OSK,and TEX should deliver solid Q1 reports and forecasts.That said,industry suppliers noted that demand was weak in January due to weather,February was a bit better,and March was back to normal,so weather disruptions are a possibility.We would avoid names that have seen significant multiple expansion(including PCAR,CMI,ITW,and AGCO)as expectations are elevated heading into the quarter.Portfolio moves may accelerate.This quarter has seen a number of strategic announcements across Machinery,including TEXs planned divestiture of its mobile crane business;ATU announced the sale of its EC&S segment;ETN announced its intent to spin Lighting and divest its Auto Fluid Conveyance business;WBC announced its merger with ZF;Kubota announced an alliance with private company Buhler to build high HP tractors;and Hino demonstrated its new Class 8 truck at arecent conference we attended.We believe that alliances and portfolio shifts could accelerate given low interest rates and the outlook for increasingly mediocre organic growth.2North America Equity Research08 April 2019Ann Duignan(1-212)622-Equity Ratings and Price TargetsMkt CapRatingPrice TargetCompanyTicker($mn)Price($)CurPrevCurEnd DatePrevEnd DateActuant CorpATU US1,582.6825.69Nn/c23.00Dec-19n/cn/cAGCO Corp.AGCO US5,605.4371.18Nn/c60.00Dec-19n/cn/cAllison Transmission HoldingsALSN US6,037.2046.80UWn/c45.00Dec-19n/cn/cCaterpillar Inc.CAT US84,187.93140.36OWn/c172.00Dec-19n/cn/cCNH IndustrialCNHI US14,971.0011.00Nn/c11.00Dec-19n/cn/cCummins IncCMI US25,910.95163.27Nn/c152.00Dec-19n/cn/cDeere&Co.DE US53,420.43165.03Nn/c154.00Dec-19n/cn/cEaton Corp.ETN US36,159.6483.25OWn/c92.00Dec-19n/cn/cIllinois Tool WorksITW US50,987.00152.20UWn/c120.00Dec-19n/cn/cKennametal Inc.KMT US3,381.5540.59Nn/c40.00Dec-19n/cn/cManitowoc Co.MTW US617.9217.40Nn/c17.00Dec-19n/cn/cMilacronMCRN US941.2413.15Nn/c13.00Dec-19n/cn/cNavistar IntlNAV US3,281.2033.11Nn/c34.00Dec-19n/cn/cOshkosh Corp.OSK US5,719.8479.33OWn/c80.00Dec-19n/cn/cPACCAR Inc.PCAR US24,260.5369.02UWn/c54.00Dec-19n/cn/cParker HannifinPH US23,908.26183.40OWn/c185.00Dec-19n/cn/cTerex CorpTEX US2,515.4233.35OWn/c42.00Dec-19n/cn/cTrimble IncTRMB US10,145.2540.50OWn/c42.00Dec-19n/cn/cWABCOWBC US6,903.74133.02NRn/cSource:Company data,Bloomberg,J.P.Morgan estimates.n/c=no change.All prices as of 05 Apr 19.3North America Equity Research08 April 2019Ann Duignan(1-212)622-Table of ContentsValuation.4Fundamentals by Region.7Bright Spot in US:Non-Residential Construction Spending8NA Trucks Beyond Peak.10Automotive Production Forecasts Revised Down Again.11Rig Counts and Well Completions Bear Watching.12China Machinery Sales Upside in Q1,2019 Forecasts Unchanged.13Limited Visibility in Agriculture.14Pricing Power Remains in Focus.18Earnings Summary.20Earnings Schedule.21Actuant Corp.22AGCO Corp.23Allison Transmission Holdings.24Caterpillar Inc.25CNH Industrial.26Cummins Inc.27Deere&Co.28Eaton Corp.29Illinois Tool Works.30Kennametal Inc.31Manitowoc Co.32Milacron.33Navistar Intl.34Oshkosh Corp.35PACCAR Inc.36Parker Hannifin.37Terex Corp.38Trimble Inc.39WABCO.404North America Equity Research08 April 2019Ann Duignan(1-212)622-ValuationThe S&P Machinery Index performed in line with the broader market in Q119(up 14%vs.S&P 500 up 14%).Within our coverage,total shareholder returns averaged 15%;top performers included AGCO(up 25%),NAV(up 24%),OSK,TRMB,and WBC(each up 23%),while the worst performers were MCRN(down 5%)and ALSN(up 3%).By sub-sector,our construction equipment group was up 17%in Q119 whilethe diversified industrials group was up 12%,the truck group was up 18%,and the agriculture equipment group was up 15%.Table 1:Total Shareholder ReturnsSource:Bloomberg,J.P.Morgan.Total Shareholder Returns2009201020112012201320142015201620172018Q1192019 YTDS&PS&P 500 Index26%15%2%16%32%14%1%12%22%-4%14%16%S&P 500 Machinery Index40%54%-10%17%27%4%-15%34%42%-15%14%18%Construction&EnginesCAT33%69%-1%2%3%3%-23%42%75%-18%7%11%CMI75%143%-19%25%33%4%-37%61%33%-22%19%23%MTW17%32%-29%72%49%-5%-30%84%64%-62%11%18%OSK321%-5%-39%39%70%-2%-18%68%42%-32%23%30%TEX14%57%-56%108%50%-33%-33%73%54%-42%17%21%TRMB17%58%9%38%16%-24%-19%41%35%-19%23%23%Construction&Engines-Average80%59%-23%47%37%-9%-27%61%51%-32%17%21%Construction&Engines-Median25%58%-24%38%41%-4%-27%65%48%-27%18%22%Diversified IndustrialsATU-2%44%-15%23%31%-26%-12%8%-2%-17%16%22%ETN33%64%-12%29%44%-8%-21%34%22%-10%18%22%ITW41%14%-10%34%41%15%0%35%39%-22%14%21%KMT20%55%-6%11%32%-30%-45%68%58%-30%11%23%MCRNNANANANANANA-37%49%3%-38%-5%11%PH29%63%-10%14%54%2%-23%48%45%-24%16%24%Diversified Industrials-Average24%48%-11%22%41%-9%-23%40%27%-23%12%20%Diversified Industrials-Median29%55%-10%23%41%-8%-22%41%30%-23%15%22%Truck and Truck ComponentsALSNNANANA-10%38%25%-22%33%30%3%3%7%CMI75%143%-19%25%33%4%-37%61%33%-22%19%23%NAV81%50%-35%-43%75%-12%-74%255%37%-39%24%28%PCAR29%60%-32%25%35%18%-27%38%15%-15%20%21%WBC65%136%-29%50%43%12%-2%4%35%-25%23%24%Truck and Components-Average62%97%-29%10%45%9%-32%78%30%-20%18%21%Truck and Components-Median70%98%-31%25%39%8%-32%50%34%-24%21%23%Ag MachineryAGCO37%57%-15%14%21%-23%1%29%25%-21%25%28%CNHINANANANA33%-27%-13%30%56%-30%11%19%DE45%56%-5%14%8%-1%-11%39%55%-3%8%11%Ag Machinery-Average41%56%-10%14%21%-17%-8%32%45%-18%15%20%Ag Machinery-Median41%56%-10%14%21%-23%-11%30%55%-21%11%19%Coverage Universe Relative Performance5North America Equity Research08 April 2019Ann Duignan(1-212)622-The S&P Machinery Index is now trading at 13.9x 2019 EPS estimates(vs.three-year average of 17.5x),1.7 turns below the S&P 500 index;our coverage universe is trading at 13.5x 2019 EPS estimates.The construction group is trading at 10.4x2019E EPS(vs.three-year average forward P/E of 17.2x).The diversified industrial group is trading at 15.1x 2019E EPS(vs.three-year average 16.7x).The truck group is trading at 11.4x 2019E EPS(vs.three-year average 17.7x).The agricultural equipment group is trading at 14.2x 2019E EPS(vs.three-year average 19.0 x).Table 2:Multiples Remain Relatively CompressedSource:Bloomberg,J.P.Morgan estimates.TSR%04/05/19YTD3Y Avg 2Y Avg 1Y AvgS&PS&P 50016%17.1x17.2x16.6x15.6x14.2xS&P Machinery18%17.5x17.1x14.7x13.9x13.1xConstruction&EnginesCaterpillar Inc11%20.2x17.8x12.9x11.5x10.8xCummins Inc23%13.8x13.3x10.6x10.5x11.1xManitowoc Co18%NANANA13.8x10.3xOshkosh Corp30%15.7x15.3x12.1x11.0 x10.0 xTerex Corp21%19.3x19.1x12.2x8.6x8.5xAverage(ex-MTW)21%17.2x16.4x12.0 x10.4x10.1xTrimble23%21.3x21.9x19.7x19.6x17.7xDiversified IndustrialsActuant Corp-A22%21.3x21.8x20.9x21.3x18.4xEaton Corp Plc22%14.8x15.0 x14.3x14.2x13.4xIllinois Tool Works21%19.6x19.9x18.4x19.1x18.0 xKennametal Inc23%17.4x15.8x13.1x12.5x12.1xMilacron Holding11%10.1x10.1x9.6x8.2x7.4xParker Hannifin24%17.4x17.1x15.2x15.5x14.3xAverage20%16.7x16.6x15.2x15.1x13.9xTruck&Truck Components Allison Transmission7%11.8x11.5x9.4x9.9x9.5xCummins Inc23%13.8x13.3x10.6x10.5x11.1xNavistar Intl28%31.0 x25.6x12.3x9.0 x12.0 xPACCAR Inc21%14.1x13.7x11.2x10.8x12.2xWABCO Holdings Inc24%17.7x17.8x16.0 x17.0 x16.1xAverage21%17.7x16.4x11.9x11.4x12.2xAgricultural MachineryAGCO Corp28%19.1x18.1x15.1x15.3x13.3xDeere&Co11%18.4x16.9x14.3x14.5x11.7xCNH Industrial19%19.5x18.8x15.3x12.7x11.3xAverage20%19.0 x17.9x14.9x14.2x12.1x20192020Forward P/E Multiple6North America Equity Research08 April 2019Ann Duignan(1-212)622-Figure 1:In January,Our Coverage Was Trading at 11.6x 2019E EPSSource:Bloomberg,J.P.Morgan estimates as of January 1,2019.Figure 2:Now the Group Average Multiple Has Expanded to 13.5x 2019E EPSSource:Bloomberg,J.P.Morgan estimates.7North America Equity Research08 April 2019Ann Duignan(1-212)622-Fundamentals by RegionThe global manufacturing PMI declined 0.7-pts YoY but was flat MoM at 52.6 in March.The US ISM Manufacturing PMI came in at 55.3 in March,up from 54.2 in February;the New Orders component was 57.4 in March,up 1.9-pts from 55.5 in February(but down 5.0-pts YoY).The data suggest that the pace of industrial activity improved in the quarter,and the index has now remained above 50(signaling expansion)for 39 consecutive months.The China NBS manufacturing PMI was 50.5in March(up 1.3-pts MoM),signaling expansion(above 50)for the first time in four months.The Eurozone Markit PMI came in at 47.5 in March(down 1.8-pts MoM and down 9.1-pts YoY)and the lowest reading since April 2013.Figure 3:US ISM New Orders Index at 57.4 in Mar19Source:Bloomberg,ISM,J.P.Morgan.Figure 4:US ISM Manufacturing Composite Index at 55.3 in Mar19Source:Bloomberg,ISM,J.P.Morgan.Figure 5:China NBS Manufacturing PMI at 50.5 in Mar19Source:Bloomberg,NBS,J.P.Morgan.Figure 6:Eurozone PMI at 47.5 in Mar19Source:Bloomberg,ISM,J.P.Morgan.2030405060708020062007200820092010201120122013201420152016201720182019Index LevelUS ISM New Orders30354045505560657020062007200820092010201120122013201420152016201720182019Index LevelUS ISM Manufacturing Composite Index20304050607020062007200820092010201120122013201420152016201720182019Index LevelChina NBS Manufacturing PMI20304050607020062007200820092010201120122013201420152016201720182019Index LevelEurozone PMI8North America Equity Research08 April 2019Ann Duignan(1-212)622-Bright Spot in US:Non-Residential Construction SpendingFigure 7:Private Non-Residential Spending up 1.4%in Q119TD.Source:US Census Bureau,J.P.Morgan.Figure 8:.The 3M ROC Is Moderating but Remains 1.0Source:US Census Bureau,J.P.Morgan.Figure 9:Total Public Spending up 9.9%in Q119TDSource:US Census Bureau,J.P.Morgan.Figure 10:.The 3M ROC Trend Is AcceleratingSource:US Census Bureau,J.P.Morgan.414,495453,640100,000150,000200,000250,000300,000350,000400,000450,000500,000Private Construction Spending:Non-Residential(SAAR,$MM)0.60.70.80.91.01.11.21.31.4Rate Of Change(x)Value Of Private Construction Put In Place,Non-Residential(SAAR)3M ROC12M ROCMean+1 St.Dev-1 St.Dev325,481325,769100,000200,000300,000400,0001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Total Public Construction Spending(SAAR,$MM)0.80.91.01.11.21999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Rate Of Change(x)Total Value Of Public Construction Put In Place(SAAR)3M ROC12M ROCMean+1 St.Dev-1 St.Dev9North America Equity Research08 April 2019Ann Duignan(1-212)622-Figure 11:State&Local Contract Awards for Highways at a PeakSource:ARTBA.Figure 12:Airport Investments up 25%Source:ARTBA.Figure 13:State Budgets Mostly Supportive of Continued InvestmentSource:ARTBA.Figure 14:Biggest Risk Is Contractor Profitability on Rising InputsSource:ARTBA.46.1 42.2 44.1 45.3 54.3 49.1 51.2 54.7 15.7 17.0 19.6 20.9 20.8 16.0 18.7 21.0$0$10$20$30$40$50$60Aug11Aug12Aug13Aug14Aug15Aug16Aug17Aug18State&Local Contract Awards(Trailing 12 Months,$B)HighwaysBridges$0$2$4$6$8$10$12$14Value Of Airport Terminal&Runway Construction Work(January-July)$BReal$BNominal$B41 39 19 8 11 8 14 19 22 9 -5 10 15 20 25 30 35 40 45 50FY 2009FY 2010FY 2011FY 2012FY 2013FY 2014FY 2015FY 2016FY 2017FY 2018Number of States Making Mid-Year Budget Cuts2%2%4%4%4%14%16%4%4%7%8%11%20%22%0%5%10%15%20%25%Steel pipes,bends,couplingsSteel&Iron castingsHighway guardrails,scaffolds,gratingsCable,spring work,chain link fencingBridge sections,expansion joints,structural steelSteel pilings,bars&tubesSteel bars,conduits,well casingsChange in Producer Prices for Steel Related InputsAug18 vs.Aug17Aug18 vs.Mar1810North America Equity Research08 April 2019Ann Duignan(1-212)622-NA Trucks Beyond PeakThe New Orders component of the ISM Manufacturing Index tends to be the best leading indicator of future freight trends and truck demand.Specifically,the YoY change in New Orders has historically led the YoY change in the Cass Freight Index(our preferred broad-based indicator of freight trends)by six to nine months.The ISM New Orders index was 57.4 in March,down 8.0%YoY but still above 50.The Cass Freight Index was down 2.1%YoY in February,while the overall freight indicator ATA Total Loads SA Index decreased 0.9%YoY to 105.7 in February.Figure 15