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Quarter-End Insights

Industrials: Macroeconomic Tailwinds Lift Market Valuations

There are a few opportunities for investors, but bargains are rare in industrials overall.

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  • As a whole, our industrials coverage universe appears fairly valued on average, with many subsectors lingering in overvalued territory. Nonetheless, the space is not without pockets of opportunity.
  • Industrials have enjoyed tailwinds from generally healthy macroeconomic conditions, particularly in the United States, and investors seem to be extrapolating those trends out over the long run.
  • Global trade has seen healthy expansion since the middle of 2013, providing a boost to many industrials stocks, especially those in transportation.

Matthew Young has a position in the following securities mentioned above: GE. Find out about Morningstar’s editorial policies.