Morgan Stanley highlights European capital goods stocks as volatile in Q1 FY26 but recommends select high‑quality industrial names.
Top picks include Epiroc, Schneider Electric, Atlas Copco, Siemens Energy, Rexel, Knorr‑Bremse, Legrand and Spirax Group for resilient demand and pricing power.
Analysts cite exposure to automation, electrification, energy efficiency and strong aftermarket revenues as drivers of earnings visibility.
Construction‑linked companies face near‑term headwinds, tightening margins for error across the sector.