Barclays on U.S. Machinery/E&C: AMECO Meeting Suggestive of Gradually Improving End Market Demand
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on U.S. Machinery/E&C: AMECO Meeting Suggestive of Gradually Improving End Market Demand
Barclays analyst, Andy Kaplowitz, said, "We recently spoke with senior management at AMECO (a division of Fluor), which provides construction equipment to both Fluor (NYSE: FLR) and external customers worldwide. As a large buyer of construction equipment, management at AMECO offered some further insight into global construction machinery trends, where we get the sense that global construction machinery demand continues to improve and that Western suppliers appear to remain the best positioned to benefit from global demand growth. Not surprisingly, mining and energy-related end markets continue to play a significant role in driving demand, and we continue to favor companies most exposed to these markets, in particular, Caterpillar (NYSE: CAT), Joy Global (Nasdaq: JOYG), and Manitowoc (NYSE: MTW) in Machinery and FLR in E&C."
"We think the upside potential of AMECO for FLR is underappreciated by many investors. While AMECO continues to perform generally well, we think the business has been partially overshadowed by more sluggish growth in FLR's Temporary Staffing and O&M businesses within Global Services. It's interesting that a majority of AMECO's business is now to customers outside of FLR, contributing to AMECO's relatively high margins that we think are a significant driver of Fluor's Global Services margin profile."
Barclays analyst, Andy Kaplowitz, said, "We recently spoke with senior management at AMECO (a division of Fluor), which provides construction equipment to both Fluor (NYSE: FLR) and external customers worldwide. As a large buyer of construction equipment, management at AMECO offered some further insight into global construction machinery trends, where we get the sense that global construction machinery demand continues to improve and that Western suppliers appear to remain the best positioned to benefit from global demand growth. Not surprisingly, mining and energy-related end markets continue to play a significant role in driving demand, and we continue to favor companies most exposed to these markets, in particular, Caterpillar (NYSE: CAT), Joy Global (Nasdaq: JOYG), and Manitowoc (NYSE: MTW) in Machinery and FLR in E&C."
"We think the upside potential of AMECO for FLR is underappreciated by many investors. While AMECO continues to perform generally well, we think the business has been partially overshadowed by more sluggish growth in FLR's Temporary Staffing and O&M businesses within Global Services. It's interesting that a majority of AMECO's business is now to customers outside of FLR, contributing to AMECO's relatively high margins that we think are a significant driver of Fluor's Global Services margin profile."
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