7 Machinery Stocks to Buy for 2022 - UBS

UBS analyst Steven Fisher has discussed the outlook for machinery stocks as we approach 2022. The analyst believes the focus is likely to stay on supply chain challenges.

Fisher urges investors to focus on construction equipment providers.

“We think infrastructure stimulus is a game changer for construction, which should improve the duration and strength of the cycle. For OEMs broadly, we expect raw material tailwinds in 2H as input costs normalize. Labor could end up being the big constraint on machinery in 2022; the economy needs more factory workers, truck drivers, and skilled craftspeople to achieve its growth potential. Ag fundamentals are solid for the near term, and while crop prices are still elevated and above breakeven levels for 2022, farm incomes will be down in 2022E, setting up uncertainty for OEMs in 2023,” Fisher said in a client note.

The analyst names Caterpillar (NYSE: CAT), United Rentals (NYSE: URI), Terex (NYSE: TEX), Oshkosh (NYSE: OSK), Cummins (NYSE: CMI), CNH Industrial NV (NYSE: CNH), and Illinois Tool Works (NYSE: ITW).

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