Manufacturing a case for industrials

Despite lagging the broader index, industrial stocks performed well in 2024, gaining over 17% on a total return basis. Sector fundamentals, however, have been more challenged. After an impressive post-COVID recovery supported double-digit earnings growth in 2022, industrial earnings have been in the doldrums alongside U.S. manufacturing activity. In fact, on a year-over-year basis, the sector is on pace to see earnings contract for the last three quarters of 2024. That said, prospects ahead look brighter. With AI and policy tailwinds, increased focus on domestic infrastructure investment and the Fed now easing policy, earnings growth is expected to accelerate in 2025, providing investors with a broad menu of investment options to choose from within the sector. On this episode, Gabriela Santos, is joined by Rob Maloney, an equity research analyst covering industrials and a co-portfolio manager here at J.P. Morgan Asset Management. Watch the video version on YouTube.  Resources: Subscribe to the Notes on the Week Ahead podcast for more insights from Dr. David Kelly: Apple Podcasts | Spotify