Industrials

Cross-border home renovation deal is full of gaps

24 Mar 2025

On paper, Chicago-based decks and railings maker Azek complements its buyer, Aussie- and NYSE-listed cladding manufacturer James Hardie. But cost cuts don't cover the 41% premium on the $9bln deal and other synergies look dubious, not least as tariffs are set to hit US consumers.

Europe’s defence push provides cover for tax raid

3 Mar 2025

US hostility to its erstwhile European allies heightens the need for the continent to rearm. Extra spending increases pressure on already stretched finances. But leaders who gathered in London over the weekend have a consolation of sorts: the crisis is an excuse to raise taxes.

Rolls-Royce has sunny skies, with a fuzzy horizon

27 Feb 2025

The $80 bln engine maker’s stock rose 20% after it beat forecasts and raised targets. A strong backlog of work plus exposure to defence suggest the sweet spot can last. One longer-term uncertainty is how to enter the market for short-haul planes without taking on too much risk.

GM illuminates good times before they stop rolling

26 Feb 2025

When the Chevy maker was struggling with its electric transition and strike in 2023, it returned cash to allay shareholders. With tariffs and auto-loan stress looming, boss Mary Barra unveiled a fresh $6 bln stock buyback plan. It projects strength as weaknesses come to the fore.

How to raise $420 bln a year for Europe’s defence

24 Feb 2025

The partial breakdown in the transatlantic alliance means the continent may need to double its defence spending. The money will have to come from a mixture of national budgets, European Union funds and perhaps a new vehicle. Many sacred cows will be slaughtered on the way.

Tank maker’s surge depends on political air cover

18 Feb 2025

Shares in $43 bln Rheinmetall have outperformed chip darling Nvidia since 2021 and doubled since the US election. Investors are implicitly assuming Europe will lift defence spending to at least 3% of GDP while hugely favouring the German firm. They could be wrong on either front.

EU joint defence debt has many hoops to go through

18 Feb 2025

European powers are contemplating the idea of a common borrowing vehicle to finance a big hike in military spending. But they need to agree on which EU countries are involved, and how to include the UK. In any case, it would only delay the fiscal cost of a major defence push.

Aircraft maintenance boom has further to fly

14 Feb 2025

In 2024, stuttering production of new jets saw repairs of older models take on fresh import for the likes of Melrose and Safran. This year deliveries could rise by 25%. But supply chain uncertainty and strong flying demand mean the maintenance profit engine can continue to motor.

Orsted’s new skipper is stuck in same wind storm

31 Jan 2025

The $16 bln wind developer replaced CEO Mads Nipper with deputy Rasmus Errboe after writedowns on US investments. It may be too late to walk away from those projects. The new boss needs to better articulate the risks facing the group – and take steps to fix its balance sheet.

GM and US interests head in different directions

28 Jan 2025

The carmaker’s quarterly revenue and profit outpaced forecasts while EVs broke even by one metric. Boss Mary Barra is also bullish for 2025, but investors pushed the stock down 10%. As the $55 bln company’s AI vistas shrink and China rises, tariffs threaten its home-turf edge.

China advance creates more AI winners than losers

27 Jan 2025

The DeepSeek model’s quality and low cost has spurred a selloff in chips and energy stocks. Chinese competition may indeed hit ‘picks and shovels’ players like $3.5 trln Nvidia. But it’s not yet certain, and making AI less the domain of Big Tech may enhance its broader benefits.

Orsted’s management discount is back

21 Jan 2025

The $16 bln Danish renewables group saw shares slump 15% after new writedowns. CEO Mads Nipper can’t control rising rates, or US disdain for offshore wind. But a valuation below its operating assets implies investors once again don’t rate Orsted’s scope to forecast rising costs.

German election campaign ignores economic ills

21 Jan 2025

Europe’s largest economy shrank by 0.5% in the last two years and may stagnate in 2025. The crisis is due to structural flaws such as a lack of investment, an ageing population and a shrinking industrial base. The government that emerges from February’s poll will need to be bold.

SpaceX will be a better $1 trln bet than Tesla

26 Dec 2024

The satellite network is a nascent monopoly, more useful and harder to dislodge every day. As at his car company, boss Elon Musk is chasing growth through maniacal cost-cutting. Thing is, that works better in space. Expect SpaceX and Tesla’s relative valuations to prove it.

EU joint debt will reappear despite French squalls

18 Dec 2024

Covid-19 saw the European Union ditch its qualms about issuing bonds backed by the 27-state bloc. Ukraine could spur a similar leap forward. France’s political turmoil is a problem, but Russian aggression and US inaction could force member states to club together to fund defence.

US-China tech war will hold Asian allies hostage

16 Dec 2024

Washington’s curbs on semiconductors and other goods are starting to elicit a response from the People’s Republic. New export control rules offer a way for Beijing to retaliate. Its leverage over giants like Japan’s Toyota or South Korea’s SK Hynix make them prime targets.

Ashtead is out of reasons to stay in London

10 Dec 2024

The $31 bln equipment-rental group plans to shift its main listing to New York. It makes sense since most earnings come from the US. Throw in the prospect of higher CEO pay and President-elect Donald Trump’s America First stance, and the switch looks like a no-brainer.

Europe’s Starlink-lite is a worthwhile also-ran

21 Nov 2024

EU satellite players like Eutelsat are debt-laden minnows compared to Elon Musk’s SpaceX-owned behemoth. But given Starlink now owns more than 60% of all working satellites, Europe has to start somewhere. Investors shouldn’t count on galactic returns, though.

Melrose flags a way through aerospace turbulence

18 Nov 2024

The $8 bln aero supplier’s shares jumped after it reported improved revenue and reaffirmed targets. Melrose’s focus on planes has coincided with big customers slowing the supply of new jets. The good news is that demand for older aircraft repairs is rising sharply.

Elliott puts too many eggs in Honeywell’s basket

13 Nov 2024

The pushy fund manager’s effort to cleave the $150 bln conglomerate is backed by its biggest investment ever. A breakup like ones at other creaking empires such as GE makes sense, but invoking those successful splits is risky. A projected uplift of at least 50% looks optimistic.