美国机械行业展望与Q4盈利预览

1、22January2019Americas/United EquityResearchConstruction & FarmMachineryResearchAnalystsJamie Cook,CFA212 5386098 HYPERLINK mailto:jamie.cook ThemisDavris44 207 8881060 HYPERLINK mailto:themis.davris AlexanderKhan212 3257714 HYPERLINK mailto:alexander.khan KevinWilson212 3255079 HYPERLINK mailto:kevi

2、n.wilson U.S. MachinerySECTOR REVIEWSECTOR REVIEW2019 Outlook and Q418 Earnings Preview HYPERLINK /r/_Xgi02AN-Vvd1 Please see our detailed 2019 Machinery Outlook and Q418 Earnings PreviewThoughts on the Group: As we look to 2019, we remain more constructive on the Machinery group as we believe the l

3、ikelihood of a mid-cycle slowdown is less likely, and instead look for growth to moderate. Furthermore, even withstanding more moderate growth, we see a number of positive catalysts/tailwinds. First, price/cost should be more of a tailwind vs a headwind, albeit in the latter part of the year, given

4、aggressive price increased in the second half of 2018 and early 2019. This is coupled with lower material costs. Any resolution on the trade war with China should be a significant positive as this weighed on the group heavily in 2018 and resulted in concerns on slowing global growth. Assuming resolu

5、tion, we see upside to stock performance for the group, in particular Caterpillar, Deere and Cummins. We also look for an incremental tailwind in 2019 given Chinas introduction of an economic stimulus. While oil prices have come in relative to last year, the rebound versus the trough still implies h

6、ealthy levels of capex spend. Plus, we still see a number of large FIDs moving ahead in LNG and petrochemical which bodes well for construction equipment. Furthermore, the higher quality names are structurally better companies reflecting massive restructurings, rock solid balance sheets, and lower c

7、hannel inventory. As such, if fundamentals were to deteriorate, companies would have to under-produce retail demand to the degree of most other downturns. As we look to FY2019 guides, we believe it is prudent for management teams to guide conservatively enough; if demand were to soften, there are en

8、ough levers to pull to support reasonable earnings levels. By end market, we prefer AG equipment first, followed by mining, oil and gas, construction equipment and lastly truck, as we are closer topeak.Machinery Top Picks: Deere: DE is safer-haven, yet has the best potential for upside for investors

9、. Farm equipment is viewed as least economically sensitive and markets are still close to trough so there is limited downside risk. In the event large AG recovers, that business is DEs highest margin business, so incrementals would surprise on the upside. We believe share repurchase should continue

10、and benefits of Precision AG will become more thematic. Caterpillar: In a risk-on environment, we prefer CAT. Potential catalysts beyond greater confidence in the macro include a definitive answer on capital allocationwhich in our opinion leans to share repo and dividendand upside to margin targets

11、along with more color on targeted returns throughout acycle.Changes: We are updating target prices and EPS estimates for a number of stocks. Target prices are changing for eight stocks: ALSN, GTES, ITW, OSK, PCAR, PH, MTW, and TEX. Details areinside.DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CON

12、TAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Creditto do in its As a be the a of of as a in Americas/United States Construction & Farm MachineryRatingNEUTRALPrice (17-Jan-19, US$)RatingNEUTRALPrice (17-Jan-19, US$)62.8

13、0Target price (US$)63.0052-week price range (US$)74.03 - 50.07Market cap(US$ m)4,916Updating Blue Sky / Grey Sky Scenariospriceisfor12priceisfor12ResearchAnalystsJamie Cook,CFA212 5386098 HYPERLINK mailto:jamie.cook ThemisDavris44 207 8881060 HYPERLINK mailto:themis.davris KevinWilson212 3255079 HYP

14、ERLINK mailto:kevin.wilson AlexanderKhan212 3257714 HYPERLINK mailto:alexander.khan 12x on our next Blue Sky estimate of $7.25, discounted back. Our Grey Sky valuation of $31 is derived by applying a multiple of 14x on our midcycle slowdown EPS estimate of $2.45, discounted back.Risks: Risks include

15、 a falloff in the agriculture markets, government regulations related to farmer subsidies (especially given AGCOs heavy concentration in Europe and South America), availability of component parts, raw materials prices, primarily steel, and fluctuations incurrency.Share priceperformance80706050A p r-

16、 18l -18O ct- 18Jan - 19AGCO.NS& P 5 0 0IN D EXOn 17-Jan-2019 the S&P 500 INDEX closed at 2635.96 Daily Jan17, 2018 - Jan17, 2019, 01/17/18 = US$73.02Quarterly EPSQ1Q2Q3Q42017A-0.021.150.79 1.102018E0.351.320.91 1.172019E-Financial and valuationmetricsYear12/17A12/18E12/19E12/20EEPS (CSadj.)(US$)3.0

17、23.754.60Prev. EPS (US$)-P/E rel. (%)107.0106.893.795.3Revenue(US$m)8,306.59,342.49,591.310,201.0EBITDA (US$ m)683.8786.4894.2956.6OCFPS (US$)7.215.917.367.98P/OCF(x)9.910.68.57.9EV/EBITDA(current)9.58.37.36.8Net debt(US$m)1,3461,2381,024747ROIC(%)4.817.528.939.58Number ofshares(m)78.28IC (current,U

18、S$m)BV/share (Next Qtr.,US$)37.4EV/IC(x)1.4Net debt (Next Qtr.,US$m)1,237.6Dividend(current, US$)0.54Net debt/tot eq(Next Qtr.,%)40.7Source: Company data, Thomson Reuters, Credit Suisse estimatesAGCO Corp (AGCO)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)8,306.59,342.49,591.310,201.0EBITD

19、A (US$ m)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)8,306.59,342.49,591.310,201.0EBITDA (US$ m)684786894957Depr. & amort.(281)(286)(319)(336)EBIT (US$)403500575621Net interest exp(45)(48)(36)(36)PBT (US$)284381482528Income taxes(134)(136)(157)(171)Profit after tax150245325356Minorities(3

20、)(0)(4)(4)Reported net income (US$)186280356387Other NPAT adjustments(56)(20)00Adjusted net income242300356387Cash Flow12/17A12/18E12/19E12/20EEBIT403500575621Net interest(45)(48)(36)(36)Change in working capital40(96)(152)(152)CAPEX(200)(251)(275)(260)Free cashflow to the firm378222296359Acquisitio

21、ns-Divestments-Cash flow from investments(494)(256)(275)(260) Changes inNetCash/Debt(80)108214277 Balance Sheet (US$)12/17A12/18E12/19E12/20EAssetsCash & cash equivalents3686488621,139Total current assets3,6283,9384,3924,872Total assets7,9728,0948,4578,817LiabilitiesTotal current liabilities2,6512,7

22、622,8492,900Total liabilities4,8765,0525,1385,189Total liabilities and equity7,9728,0948,4578,817 Netdebt1,3461,2381,024747 Per share12/17A12/18E12/19E12/20ENo. of shares (wtd avg)80807878CS adj. EPS3.023.754.605.00Prev. EPS (US$)-Dividend (US$)0.560.580.550.55 Free cash flowpershare4.722.773.814.63

23、 Earnings12/17A12/18E12/19E12/20ESales growth (%)6.4EBIT growth (%)39.724.015.08.0Net profit growth (%)19.923.918.78.7EPS growth (%)22.524.022.68.7EBITDA margin (%)9.4EBIT margin (%)6.1Pretax margin (%)5.2Net margin(%)3.8Valuation12/17A12/18E12/19E12/20EEV/Sales (x)0.750.660.620.56EV/EBITDA (x)6.8EV

24、/EBIT (x)15.512.310.39.1P/E (x)20.816.813.712.6Price to book (x)1.4Asset turnover1.0Returns12/17A12/18E12/19E12/20EROE stated-return on (%)6.49.311.411.4ROIC (%)9.6Gearing12/17A12/18E12/19E12/20ENet debt/equity (%)43.540.730.820.6Interest coverage ratio (X)8.910.516.017.2Quarterly EPSQ1Q2Q3Q42017A-0

25、.021.150.791.102018E0.351.320.911.17Company BackgroundCompany BackgroundAGCO is a manufacturer and distributor of agricultural equipment and related replacement parts worldwide. It sells agricultural equipment including tractors, self-propelled sprayers, hay tools, forage equipment, and dieselengine

26、s.Blue/Grey Sky ScenarioOur Blue SkyOur Blue SkyScenario (US$)79.00Our Blue Sky scenario assumes that AGCO reaches $11.2B in sales driven by a robust recovery in AG across all regions (NA, EU and SA) which allows the company to hit 10% operating margins. Our Blue Sky valuation of $79 is derived by a

27、pplying a multiple of 12x on ournextBlueSkyestimateof$7.25,discountedback.Our Grey Sky Scenario (US$)(from 45.00)31.00 Our Grey Sky Scenario (US$)(from 45.00)31.00Our Grey Sky scenario reflects our assumption for a midcycle slowdown, with AGCO sales dropping to just $8.1B on a muted AG recovery and

28、top line pressures and operating margins of just 7.1%. Our Grey Sky valuation of $31 is derived by applying a multiple of 14x on our midcycle slowdown EPS estimate of $2.45, discounted back.Share price performance80706050Apr- 18l -18Oct- 18Jan - 19AGCO.NS& P 5 0 0 IND EX 2019E- Source: Company data,

29、 Thomson Reuters, Credit Suisse estimatesOn 17-Jan-2019 the S&P 500 INDEX closed at 2635.96 Daily Jan17, 2018 - Jan17, 2019, 01/17/18 = US$73.02Americas/United States Industrial MachineryRatingPrice(17-Jan-19, US$)48.32Targetprice(US$)(from 55.00) 54.00 52-week pricerange(US$)53.44 -37.45Market cap(

30、US$ m)6,264Allison Transmission (ALSN)Updating Estimates and Target Pricepriceisfor12Enterprise value(US$ m)8,574 Updating Estimates: We are tweakingpriceisfor12Research Analystsand $4.98, from $5.36 and $5.02, respectively, to reflect a moderation in key end markets, including off-highway applicati

31、ons and global truck markets.212 538 6098Jamie Cook, CFA Valuation: Our target price of $54 (was $55) is based on an EV/EBITDA212 538 6098 HYPERLINK mailto:jamie.cook jamie.cookmultiple of 8x our 2020 Adj. EBITDA, discounted back.Themis Davris Risks: Risks include the cyclical nature of ALSNs busine

32、ss, high44 207 888 1060 HYPERLINK mailto:themis.davris KevinWilson212 3255079 HYPERLINK mailto:kevin.wilson AlexanderKhan212 3257714 HYPERLINK mailto:alexander.khan concentration of sales among the companys top five OEM customers, emerging market exposure, governmental risk with sales to the US mili

33、tary, and high raw material price exposure.Shareprice performanceFinancial and valuationmetrics5550454035A p r- 18l -18O ct- 18Jan - 19ALSN.NS& P 5 0 0IN D EXOn 17-Jan-2019 the S&P 500 INDEX closed at 2635.96 Daily Jan17, 2018 - Jan17, 2019, 01/17/18 = US$44.6Quarterly EPSQ1Q2Q32017A0.520.620.76 201

34、8E1.081.291.27 2019E-Year12/17A12/18E12/19E12/20EEPS (CSadj.)(US$)3.364.584.944.98Prev. EPS (US$)-5.365.02P/E rel. (%)74.067.267.073.6Revenue(US$m)2,262.02,675.32,716.72,578.3EBITDA (US$ m)868.01,105.31,131.11,085.2OCFPS (US$)4.395.686.816.96P/OCF(x)9.88.57.16.9EV/EBITDA(current)9.97.87.67.9Net debt

35、(US$m)2,3692,3101,9691,654ROIC(%)20.3923.3224.4424.22Number ofshares(m)129.64IC (current,US$m)BV/share (Next Qtr.,US$)5.4EV/IC(x)2.8Net debt (Next Qtr.,US$m)2,310.2Dividend(current, US$)0.60Net debt/tot eq(NextQtr.,%)327.1Source: Company data, Thomson Reuters, Credit Suisse estimatesAllison Transmis

36、sion (ALSN)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)2,262.02,675.32,716.72,578.3EBITDA (US$ m)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)2,262.02,675.32,716.72,578.3EBITDA (US$ m)8681,1051,1311,085Depr. & amort.(170)(166)(185)(185)EBIT (US$)652907933887Net interest exp(103)

37、(120)(110)(110)PBT (US$)527791819773Income taxes(23)(177)(197)(186)Profit after tax504613623588Minorities-Reported net income (US$)504613623588Other NPAT adjustments0000Adjusted net income504613623588Cash Flow12/17A12/18E12/19E12/20EEBIT652907933887Net interest(103)(120)(110)(110)Change in working c

38、apital3770(25)CAPEX(91)(89)(109)(103)Free cashflow to the firm567673750719Acquisitions-Divestments-Cash flow from investments(91)(89)(109)(103) Changes inNetCash/Debt(390)59341315 Balance Sheet (US$)12/17A12/18E12/19E12/20EAssetsCash & cash equivalents199238579894Total current assets6327671,0841,376

39、Total assets4,2054,3134,5674,790LiabilitiesTotal current liabilities417454481507Total liabilities3,5163,6073,6343,660Total liabilities and equity4,2054,3134,5684,790 Netdebt2,3692,3101,9691,654 Per share12/17A12/18E12/19E12/20ENo. of shares (wtd avg)150134126118CS adj. EPS3.364.584.944.98Prev. EPS (

40、US$)-5.365.02Dividend (US$)0.590.600.600.60 Free cash flowpershare3.785.025.956.09 Earnings12/17A12/18E12/19E12/20ESales growth (%)22.918.31.5(5.1)EBIT growth (%)44.439.12.9(4.9)Net profit growth (%)134.421.71.5(5.6)EPS growth (%)163.836.38.00.8EBITDA margin (%)38.441.341.642.1EBIT margin (%)28.833.

41、934.434.4Pretax margin (%)23.329.630.230.0Net margin(%)22.322.922.922.8Valuation12/17A12/18E12/19E12/20EEV/Sales (x)3.823.203.033.07EV/EBITDA (x)7.9EV/EBIT (x)8.9P/E (x)14.4Price to book (x)5.0Asset turnover0.5Returns12/17A12/18E12/19E12/20EROE stated-return on (%)57.087.976.057.0ROIC (%)20.423.324.

42、424.2Gearing12/17A12/18E12/19E12/20ENet debt/equity (%)343.8327.1211.0146.3Interest coverage ratio (X)8.1Quarterly EPSQ1Q2Q3Q42017A0.520.620.761.512018E1.081.291.270.93Company BackgroundCompany BackgroundAllison Transmission manufactures fully-automatic transmissions for heavy-duty (HD) and medium-d

43、uty (MD) commercial vehicles, heavy and medium-tactical US military vehicles and hybrid systems for transitbusesBlue/Grey Sky ScenarioOur Blue SkyOur Blue SkyScenario (US$)(from 66.00)65.00Our Blue Sky scenario assumes continued strength in the NA on- highway and global off-highway business as well

44、as solid growth in Defense and parts. In this scenario ALSN reaches $3.1B in sales and delivers 44% EBITDA margins. Our Blue Sky valuation of $65 is derived by applying a multiple of 7x on our Blue Sky EBITDA estimate of $1.3B, discountedback.Our Grey Sky Scenario (US$)(from 43.00)38.00 Our Grey Sky

45、 Scenario (US$)(from 43.00)38.00Our Grey Sky scenario reflects a moderate slowdown in the NA on- highway truck cycle, coupled with declines in the off-highway and Parts business. In this scenario ALSNs sales drop to $2.34B and the company delivers 36% EBITDA margins. Our Grey Sky valuation of $38 is

46、 derived by applying a multiple of 8x on our midcycle slowdown EBITDA estimate of $850M, discounted back. Share price performance5550454035Apr- 18l -18Oct- 18Jan - 19ALSN.NS& P 5 0 0 IND EX 2019E- Source: Company data, Thomson Reuters, Credit Suisse estimatesOn 17-Jan-2019 the S&P 500 INDEX closed a

47、t 2635.96 Daily Jan17, 2018 - Jan17, 2019, 01/17/18 = US$44.6Americas/United States Industrial MachineryRatingPrice(17-Jan-19, US$)145.10Targetprice(US$)168.0052-week pricerange(US$)192.50 -125.49Market cap(US$ m)23,953Cummins Inc. (CMI)Updating Blue Sky / Grey Sky Scenariospriceisfor12Enterprise va

48、lue(US$ m)24,470 Valuation: Our Blue Sky valuation of $187 ispriceisfor12ResearchAnalystsJamie Cook,CFA212 5386098of 11x on our Blue Sky EPS estimate of $19, discounted back. Our Grey Sky valuation of $103 is derived by applying a multiple of 13x on our 2020 midcycle slowdown EPS estimate of $8.75,

49、discounted back. HYPERLINK mailto:jamie.cook jamie.cook Risks: Risks include the volatility of the Class 6-8 truck cycle, results ofThemisDavris44 207 8881060 HYPERLINK mailto:themis.davris KevinWilson212 3255079 HYPERLINK mailto:kevin.wilson AlexanderKhan212 3257714 HYPERLINK mailto:alexander.khan

50、emissions changes, and the price and availability of raw materials such as steel.Year12/17A12/18E12/19E12/20EEPS (CS adj.) (US$)Year12/17A12/18E12/19E12/20EEPS (CS adj.) (US$)10.6215.2015.6514.25Prev. EPS (US$)-P/E rel. (%)70.360.863.677.2Revenue (US$ m)20,428.023,840.925,014.322,953.2EBITDA (US$ m)

51、3,243.04,001.63,999.03,576.9A p r -1 8l -18O- 18n - 19OCFPS (US$)13.6114.5216.8415.46P/OCF (x)13.010.08.69.4CM I.NS& P 5 0 0 IN D EXEV/EBITDA (current)6.938-177n17, 2018 -Jan17, 2019, 01/17/18 =US$183.69ROIC(%)11.9730.4427.3722.812 001 801 601 401 20On 17-Jan-2019 the S&P 500 INDEX closed at 2635.96

52、 Daily JaQuarterly EPSQ1Q2Q32017A2.362.532.71 2018E3.304.174.05 2019E-Net debt(US$m)423517Number ofshares(m)165.08IC (current,US$m)BV/share (Next Qtr.,US$)45.5EV/IC(x)2.8Net debt (Next Qtr.,US$m)517.2Dividend(current, US$)3.71Net debt/tot eq(NextQtr.,%)6.4Source: Company data, Thomson Reuters, Credi

53、t Suisse estimatesCummins Inc. (CMI)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)20,428.023,840.925,014.322,953.2EBITDA (US$ m)Income Statement12/17A12/18E12/19E12/20ERevenue (US$ m)20,428.023,840.925,014.322,953.2EBITDA (US$ m)3,2434,0023,9993,577Depr. & amort.(583)(614)(635)(597)EBIT (US

54、$)2,4463,3703,2542,876Net interest exp(51)(80)(70)(50)PBT (US$)2,3652,7863,1542,796Income taxes(1,371)(622)(725)(643)Profit after tax9942,1642,4282,153Minorities5(15)-0-0Reported net income (US$)9992,1492,4282,153Other NPAT adjustments0000Adjusted net income9992,1492,4282,153Cash Flow12/17A12/18E12/

55、19E12/20EEBIT2,4463,3703,2542,876Net interest(51)(80)(70)(50)Change in working capital331(147)(450)(413)CAPEX(506)(731)(740)(740)Free cashflow to the firm1,7711,6311,8731,597Acquisitions(662)(70)00Divestments-Cash flow from investments(1,052)(889)(740)(740) Changes inNetCash/Debt(235)(94)479216 Bala

56、nce Sheet (US$)12/17A12/18E12/19E12/20EAssetsCash & cash equivalents1,3691,2591,7381,953Total current assets8,9289,71410,81811,608Total assets18,07519,05620,26521,198LiabilitiesTotal current liabilities5,6776,4596,6346,795Total liabilities9,91110,97511,15011,311Total liabilities and equity18,07519,0

57、5620,26521,198 Netdebt42351738(177) Per share12/17A12/18E12/19E12/20ENo. of shares (wtd avg)167163155151CS adj. EPS10.6215.2015.6514.25Prev. EPS (US$)-Dividend (US$)13.31 Free cash flowpershare10.5910.0212.0710.57 Earnings12/17A12/18E12/19E12/20ESales growth (%)16.716.74.9(8.2)EBIT growth (%)22.537.

58、8(3.4)(11.6)Net profit growth (%)(28.2)115.113.0(11.3)EPS growth (%)24.843.22.9(8.9)EBITDA margin (%)15.916.816.015.6EBIT margin (%)12.014.113.012.5Pretax margin (%)11.611.712.612.2Net margin(%)4.99.09.79.4Valuation12/17A12/18E12/19E12/20EEV/Sales (x)1.191.030.961.04EV/EBITDA (x)6.9EV/EBIT (x)10.0P/

59、E (x)10.2Price to book (x)2.4Asset turnover1.1Returns12/17A12/18E12/19E12/20EROE stated-return on (%)14.129.731.224.5ROIC (%)12.030.427.422.8Gearing12/17A12/18E12/19E12/20ENet debt/equity (%)(1.8)Interest coverage ratio (X)48.042.146.557.5Quarterly EPSQ1Q2Q3Q42017A2.362.532.713.032018E3.304.174.053.

60、69Company BackgroundCompany BackgroundCummins Inc. designs, manufactures, distributes and services diesel and natural gas engines, and engine-related component products worldwide. It operates in four segments: Engine, Components, Power Generation, andDistribution.Blue/Grey Sky ScenarioOur Blue SkyOu