Historical chart on global oil & gas capex and oil price

Courtesy of Bank of America Merrill Lynch Engineering and Construction team in the US, who asked themselves which sectors/stocks might potentially benefit the infrastructure spending plan of Trump, of which so far we don’t know nothing…

Source: Bank of America Merrill Lynch

According to their report published on Jan 12 :

« We expect stocks with leverage to infrastructure and federal budgets (ACM, JEC, KBR) to perform well under the Trump administration in ’17, as the stocks should transition from sentiment-driven performance to actual backlog improvement. Visibility on an infrastructure plan funding under the new administration remains murky, which is the biggest pushback on the stocks (we think it will be a combination of international cash repatriation and increasing private investment). But our analysis of US non-res cycles back to the 60s indicates that we are sitting at one of the worst downturns in public non-res spending despite solid overall macro outlook, with a potential for positive catalyst on the funding side in 1H17, which we think sets us up for a multi-year recovery in US infrastructure spending. Names like ACM and JEC are more levered to front-end engineering & design work vs. construction work, and are likely to see earlier recovery in bidding activity and backlog, which should support premium valuation. On top of that, the BofAML US Aerospace & Defense team believes that we are in the early innings of a multi-year recovery in DoD spending, which should also be supported by Trump administration, and provide for an additional growth tailwind to E&C names with federal exposure (ACM, JEC, KBR). »

Source: Bank of America Merrill Lynch

Les commentaires sont fermés.