By Al Root
Bernstein launched coverage of U.S. industrial stocks this week, and it likes most of what it sees.
The firm has seven new Buy ratings and one Sell within what it calls the multi-industry and electrical equipment sectors.
The buys are: Air-conditioning companies Johnson Controls and Trane Technologies; data-center infrastructure providers Vertiv and nVent; elevator maker Otis; aerospace and industrial component maker Parker Hannifin; and automation technologies provider Emerson Electric.
The first four stocks are tied to artificial-intelligence data-center trade.
"We are positive on our data-center power/cooling names...our price targets imply about 30% to 40% upside," wrote analyst Varun Govindaraj, adding they have technical advantages. "The markets they play in will eventually see growth taper, but [the] companies are well-positioned for when this happens."
His Vertiv target is $416. Shares recently traded for about $301. His nVent target is $218, compared with a recent level of $164. His targets for Johnson and Trane are $176 and $550, respectively. Johnson Controls stock was recently $144, while Trane shares were $459.
Otis isn't a data-center stock and "fits into its own unique bucket," added Govindaraj. He sees sales growth in China, significant market for Otis, returning in 2027. His price target for shares is $97, while Otis stock recently traded for $70.
Parker-Hannifin and Emerson represent quality exposure to themes of automation and aerospace. Bernstein's Parker price target is $1026, which would be notable upside from a recent level of $883. The Emerson target is $175, compared with a recent $139.
That's all the good news. The bad news is he recommends selling 3M shares. His price target is $131, below recent levels of $154.
"We think 3M leadership, [CEO] Bill Brown, [and CFO] Anurag Maheshwari, have done a great job unlocking value," wrote Govindaraj. Still, he worries that ramping up revenue growth will be harder than investors expect. 3M expects 2026 sales to grow about 3% year over year on a comparable basis.
He also worries about persistent liabilities tied to cleaning up so-called forever chemicals, PFAS, which 3M once produced and have been found in water supplies. 3M has reserved billions of dollars for cleanup.
Overall, 48% of analysts covering 3M stock rate shares Buy. The average Buy-rating ratio for S&P 500 stocks typically ranges from 55% to 60%.
The Buy-rating ratios for Otis, Trane, and Johnson Controls are also around 50%. The Buy-rating ratios for Vertiv and nVent are above 80%. The Buy-rating ratios for Emerson and Parker are about 70%.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 10, 2026 13:12 ET (17:12 GMT)
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