Industrials and Machinery ratings adjusted at Evercore post-election

Investing.com -- Evercore ISI revised its ratings for several industrial and machinery stocks following the US election results, citing a more optimistic business outlook tied to the anticipated "pro-business Trump" policies.

However, the investment bank remains cautious, stating that “Trump/Red Sweep requires less caution but not broad bullishness with current starting point challenging.”

The firm upgraded Timken Company (NYSE:TKR ), Cummins (NYSE:CMI ), and Paccar (NASDAQ:PCAR ), prioritizing "SMID cap & domestic oriented stories over global players with less compelling valuations."

Timken, an underperforming SMID cap, was upgraded from In-Line to Outperform, with Evercore noting it comes with “risky execution, yes, but worth the relative risk-reward.”

Paccar’s upgrade reflects Evercore’s view that while they are “still anxious about near-term margin pressure,” a recovery in the “second half of 2025 as emission pre-buy kicks in” could support growth.

Cummins, which analysts highlight as the “#1 truck engine & after treatment supplier,” may also benefit from an early truck emission pre-buy cycle expected to ramp up in 2025.

On the other hand, Evercore downgraded Eaton (NYSE:ETN ), Caterpillar (NYSE:CAT ), ESAB Corp (NYSE:ESAB ), and Illinois Tool Works (NYSE:ITW ), citing high valuations and specific risks.

Caterpillar faces “downside EPS risk” in light of “elevated construction equipment channel inventory” and strong global competition.

Meanwhile, Eaton’s downgrade is described as a “valuation ‘breather’ call,” as its recent performance has left limited room for additional gains despite solid fundamentals.

Overall, Evercore’s current approach toward the sector emphasizes a cautious stance, recommending “more selective” investments rather than a broad bullish view on the sector.

Their top 5 favorite stocks now include Parker Hannifin (NYSE:PH ), United Rentals (NYSE:URI ), Cummins, Timken, and Paccar.

Source: Investing.com