Investing.com — BofA Securities has identified two of its preferred ideas within European industrials, arguing that current share prices already reflect a prolonged downturn despite signs that the weakness is cyclical rather than structural.
While near-term demand remains under pressure from sluggish European industrial production and margin headwinds linked to higher input costs, the broker believes valuations have fallen to levels that imply a cancellation of recovery rather than a delay, creating an attractive entry point for investors willing to look beyond the current slowdown.
is BofA’s preferred name in the space, supported by a combination of deeply discounted valuation and long-term exposure to warehouse automation, rating the stock “buy.”
The broker notes that the stock is trading near cyclical trough multiples despite maintaining solid earnings prospects and benefiting from continued customer investment in automation projects.
Importantly, KION has strengthened contract terms through price-adjustment clauses, improving margin visibility compared with previous cycles.
BofA believes the market is overlooking the resilience of the automation business and sees significant rerating potential once industrial demand begins to stabilize.
is also rated “buy”, with BofA arguing that the company’s valuation more than compensates investors for current cyclical risks. The broker expects near-term pressure on orders and profitability as industrial activity remains subdued, but views these challenges as temporary.
Trading at a steep discount to historical levels, Jungheinrich offers leveraged exposure to any improvement in European manufacturing conditions.
BofA believes even modest evidence of recovery in end markets could drive a meaningful reappraisal of the stock, given how pessimistic current market expectations have become.
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