By: Scott Davis
In October, on our launch of Melius, we upgraded ETN to Overweight vs. our prior view and leaned in more heavily on cyclicals. And the ETN recommendation more specifically was based on a valuation discount to peers like PH (Parker-Hannifin) and ITW that were trading at big premiums. Low expectation cyclical names (i.e. laggards) can be compelling stories in upcycles, and that’s how we view ETN.