Industrials: Stronger U.S. Dollar, Weaker Energy Activity Weigh
Despite generally rich valuations across the industrials space, some pockets of value still exist.
Continuing the theme of recent quarters, we find few bargains throughout our industrials coverage. No stocks trade in the 5-star range, and only about 20 (out of 172) trade in 4-star territory. That said, this dynamic doesn't deviate too far from the broader market. At the time of writing, industrials stocks carried a market price/Morningstar fair value estimate ratio of 1.13 (13% overvalued compared with our discounted cash flow-derived fair value estimates), while the price/median fair value of all stocks that Morningstar covers was 1.03 (3% overvalued).
David Silver does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.