Nomura Securities on Industrials: Q1 Wrap-Up - Organic Growth is Accelerating Again

May 3, 2012 10:25 AM EDT
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Nomura Securities on Industrials: Q1 Wrap-Up - organic growth is accelerating again.

Analyst, Shannon O'Callaghan, said, "After decelerating since a 1Q11 peak, the organic growth rate for the sector reaccelerated slightly in 1Q, and we expect further improvement. The U.S. remains solid, Europe remains weak, and China is split with construction very weak, but discrete automation and short-cycle industrial trends rebounding (both trends consistent with our recent China trip takeaways). Stock highlights: Honeywell (NYSE: HON): cleanest beat and raise; Danaher (NYSE: DHR): looked solid with a bottom in organic growth, though the market was less enthused; Dover (NYSE: DOV): Sound Solutions (SS) transition pressures stole the upside, but we see a sharp positive EPS swing for SS in 2H; Rockwell Automation (NYSE: ROK): Missed on incrementals in F2Q, but we see China, U.S., and incrementals all better in F3Q.; Emerson (NYSE: EMR): Missed and cut as we previewed as a risk, but we think the turn is finally here."

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