Steve Tusa, an industrial analyst at JP Morgan, dives deep into the bustling industrial sector. He discusses the explosive growth of data centers and the innovative technologies enabling them. Tusa shares insights on the rise of Vertiv and its impact on the market. The contrasting fortunes of Honeywell and GE raise questions about strategic direction in a changing landscape. He also highlights the importance of adaptability and the potential of new energy solutions like modular nuclear reactors, all while navigating the complexities of industrial stock growth.
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insights INSIGHT
Tax Breaks Help But Don’t Create Demand
Tax incentives that allow immediate expensing for U.S. plants will help but rarely create long multi-year cycles alone.
Firms still need underlying demand to justify large factory builds despite generous tax treatment.
insights INSIGHT
Automation Firms Ride Factory Cycles
Automation providers like Rockwell and Emerson benefit when factories are built because they supply control and intelligence systems.
But overall industrial CapEx trends and cyclical timing determine the magnitude of their upside.
insights INSIGHT
Electrification Stocks Are Central Winners
Electrical and electrification plays like Vertiv and Eaton are core beneficiaries of the current cycle.
After recent confirmatory data points, Steve Tusa is unusually bullish on the electrification trend.
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In this episode of The Real Eisman Playbook, Steve is joined by Steve Tusa from JP Morgan to discuss the industrial sector. They discuss the sector’s history and current themes, the rapid growth of data centers, the rise of Vertiv, and the lessons to learn from Honeywell and GE.
0:00:00 - Intro
0:01:56 - The Industrial Sector: History & Themes
0:04:48 - Power Grid Strain & DIY Power Plants
0:06:58 - Vertiv, Eaton, Hubbell, & HVAC Stocks
0:11:56 - History of Vertiv & Their Current Pricing Power
0:21:35 - Will Trump’s Strategy Be Effective?
0:28:57 - Why Honeywell Isn’t the Next GE
0:34:18 - What Went Wrong with Honeywell?
0:38:52 - What Went Wrong with GE?
0:50:55 - 3M & JCI
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