This article first appeared on GuruFocus .
UBS has highlighted 10 industrial companies it sees as positioned for a broader capital-spending cycle, with manufacturing, transportation, defense and construction among the areas expected to gain from improving investment conditions.
The list includes Lockheed Martin ( NYSE:LMT ), United Airlines (UAL), C.H. Robinson Worldwide ( NASDAQ:CHRW ), BorgWarner (BWA), UL Solutions (ULS), Solstice Advanced Materials (SOLS), Eaton (ETN), Advanced Drainage Systems ( NYSE:WMS ), United Rentals (URI) and Packaging Corp. of America (PKG), according to a Wednesday report.
UBS said the industrial sector is emerging from a prolonged manufacturing downturn, while inventory trends and short-cycle indicators have improved. The firm also pointed to stronger operating cash flow outside technology, which could provide companies with more resources for investment and other corporate uses.
Among the individual companies, UBS assigned price targets ranging from $80 for Solstice Advanced Materials to $1,350 for United Rentals. Advanced Drainage Systems carried the largest implied upside at 62%, based on Sept. 11 closing prices.
The bank cited potential catalysts including defense demand, airline earnings, freight productivity, electrification, construction activity and packaging pricing. Higher interest rates and weaker economic growth remain risks to the broader industrial outlook.
