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1、North America Equity Research 26 August 2010 Electrical Equipment N = Neutral; UW = Underweight. 5 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Table 4: Large Cap Group Stock Performance Price YTD One Month 3 Months 6 Months 12 Months 8/25/10 % Change Rel. C
2、hg. % Change Rel. Chg. % Change Rel. Chg. % Change Rel. Chg. % Change Rel. Chg. S 12-Month Rolling Average $ in millions -80% -30% 20% 70% Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 100 200 300 400 500 600 700 800 ConsumptionYOY change Source: AMT and
3、AMTDA. Figure 34: Electroindustry Business Confidence Index (North America) 0 20 40 60 80 100 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Current Conditions IndexFuture Conditions Index Growth Threshold Source: National Electrical Manufacturers Association. 19 North America
4、 Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Industry-Specific Monthly Data Aerospace by comparison, the previous month had seen 49 orders for Boeing and 50 orders for Airbus. On a three-month rolling average basis, orders were up by 108% y/y. Boeing and Airbus delivered
5、 89 aircraft in July compared to 87 in June, with Boeing delivering 41 aircraft and Airbus delivering 48 jets versus the 43 and 44 deliveries, respectively, in the previous month. Companies in our coverage universe affected by aerospace and defense fundamentals include GE, HON, ITT, and TXT. 20 Nort
6、h America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Figure 35: Aerospace 12-Month Rolling Average (30) (20) (10) 0 10 20 30 40 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 AerospaceDefense Source: U.S. Census. Figure 36: Aerospace
7、 12-Month Rolling Average (75) (50) (25) 0 25 50 75 100 125 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 AerospaceDefense Source: U.S. Census. Figure 37: Aerospace Capacity Utilization and Backlog YOY % Change 30 40 50 60 70 80 90 100 Jan-01 Jan-02 Jan-03 Jan-0
8、4 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 (60) (40) (20) 0 20 40 60 80 Capacity UtilizationBacklog Source: U.S. Census and Federal Reserve. Figure 38: Producer Price Indices YOY % change (4) (2) 0 2 4 6 8 10 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Civilian AircraftEng
9、ine orders were up by 82% y/y while declined 30% sequentially. Fed data indicate that construction machinery IP increased 53% y/y in July. As for pricing, the BLS reported that pricing for construction equipment declined moderately by 0.5% y/y in July. Lastly, employment for the residential construc
10、tion industry posted its 43rd straight y/y drop, down 8.9% from last year in July. Non-residential employment was also down 5.4% in July. Average weekly hours declined moderately by 2.2% y/y for residential construction while hours worked for non-residential buildings declined by 0.5% in June. Figur
11、e 62: Non-Residential Construction Spending YOY % Change (40) (30) (20) (10) 0 10 20 30 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Private, Non-ResTotal, Non-Res Source: U.S. Census. Figure 63: Private Residential Construction Spending YOY % Change (40) (30) (20) (1
12、0) 0 10 20 30 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: U.S. Census. Companies in our coverage universe affected by construction and housing fundamentals include HON, IR, TYC, and MMM. 28 North America Equity Resear
13、ch 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Figure 64: Non-Residential New Contracts -60% -40% -20% 0% 20% 40% 60% Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Source: McGraw-Hill Construction Dodge. Figure 65: Non-Residential Spending -40% -30% -20% -
14、10% 0% 10% 20% 30% Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Source: McGraw-Hill Construction Dodge. Figure 66: ABI Residential Billing 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: Architecture Billing Index
15、Figure 67: ABI Commercial Billing 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: Architecture Billing Index Figure 68: ABI Institutional Billing 35.0 40.0 45.0 50.0 55.0 60.0 65.0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-
16、08 Jan-09 Jan-10 Source: Architecture Billing Index Figure 69: Housing Starts Millions of Units, saar 0.2 0.7 1.2 1.7 2.2 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Source: U.S. Census. 29 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212)
17、622-6623 Figure 70: Existing Home Sales Millions of Units, saar 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: NAR Figure 71: Sales of Existing Homes YOY % Change, Rolling 3-Month Average (30) (20) (10) 0 10 20 30 Jan-01 J
18、an-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: NAR. Figure 72: Housing Permits Millions of Units, saar 0.3 0.8 1.3 1.8 2.3 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Source: U.S. Census. Figure 73: Pending Home Sales Index YOY % Change, saar,
19、Index: 2001=100 (30) (20) (10) 0 10 20 30 40 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: NAR. Figure 74: Total Number of Construction Employees YOY % Change (30) (20) (10) 0 10 20 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Residential Non
20、Residential Source: BLS. Figure 75: Construction Machinery - Inventory to Sales Inventory/Shipments 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: U.S. Census. 30 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CF
21、A (1-212) 622-6623 Figure 76: Construction Machinery Shipments (in $) YOY % Change (50) (30) (10) 10 30 50 70 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Figure 77: Construction Machinery Orders (in $) YOY % Change (80) (30) 20 70 120 170 220 270 Jan-01 Jan-02 Jan-03 Jan-0
22、4 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Figure 78: Construction Machinery - IP vs. Backlog YOY % Change (60) (40) (20) 0 20 40 60 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 (50) 0 50 100 150 BacklogIndustrial Production Source: U.S. Census and Federal Reserve. Figure 7
23、9: PPI - Construction Machinery YOY % Change (2) 0 2 4 6 8 10 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: BLS. Figure 80: French Construction Permits Issued In thousands of units 20 25 30 35 40 45 50 55 60 65 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 J
24、an-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: DataStream. Figure 81 German Construction Permits Issued In thousands of units 3 5 7 9 11 13 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-
25、10 Source: DataStream. 31 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Energy Rig counts increase m/m. Natural gas at Henry Hub averaged $4.63 for the month, down 4% sequentially and up 37% y/y. Crude oil prices increased, averaging $76.35, up 1% from June l
26、evels and up 25% from a year ago. Baker Hughes reported that the global rig count increased by 46% on a y/y basis in July and was up 173 rigs from last month. According to the US Census, oil/gas machinery orders increased 26% y/y in June and shipments decreased 14% y/y. The backlog decreased 13% y/y
27、, and was up 5.8% sequentially. Inventories declined by 9% y/y and declined by 4% sequentially. The Census reported that power generation equipment orders were up 18% y/y, and shipments increased 8% y/y during June. Sequentially, power generation equipment orders saw decline of 14% while shipments i
28、ncreased by 19%. We present trends below using a 12-month moving average, as these data series can be volatile given sporadic order patterns of major customers. Lastly, the Federal Reserve reported that industrial production in the oil and gas sector increased 55% y/y in July based on seasonally adj
29、usted data. Figure 82: Power Generation Equipment YOY % Change; 12-Month Rolling Average (40) (20) 0 20 40 60 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Orders Shipments Source: U.S. Census. Figure 83: Worldwide Rig Count Number of rigs in units, YOY % Change 1,000
30、1,500 2,000 2,500 3,000 3,500 4,000 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 (60) (40) (20) 0 20 40 60 Rig CountYOY % Chg. Source: Baker Hughes. Companies in our coverage universe affected by energy- related fundamentals include GE, DHR, DOV, and SPW. 32 North Ame
31、rica Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 Figure 84: Oil and (2) no part of any of the research analysts compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. I
32、mportant Disclosures Lead or Co-manager: JPMSI or its affiliates acted as lead or co-manager in a public offering of equity and/or debt securities for General Electric Co. within the past 12 months. Director: A senior employee, executive officer or director of JPMorgan Chase during the past 12 month
33、s, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services. General Electric Co. is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking se
34、rvices, non-investment banking securities-related services and non-securities-related services. Honeywell is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and no
35、n-securities-related services. Ingersoll Rand is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non- investment banking securities-related services and non-securities-related services. SPX Corp. is or was in the p
36、ast 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company non-investment banking securities-related services and non- securities-related services. Investment Banking (past 12 months): JPMSI or its affiliates received in the past 12 months compensation for investment b
37、anking services from Danaher, General Electric Co., Honeywell, Ingersoll Rand. Investment Banking (next 3 months): JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next three months from Danaher, General Electric Co., Honeywell, Ingers
38、oll Rand, SPX Corp Non-Investment Banking Compensation: JPMSI has received compensation in the past 12 months for products or services other than investment banking from Danaher, General Electric Co., Honeywell, Ingersoll Rand, SPX Corp An affiliate of JPMSI has received compensation in the past 12
39、months for products or services other than investment banking from Danaher, General Electric Co., Honeywell, Ingersoll Rand, SPX Corp J.P. Morgan and/or its affiliates are acting as financial advisor to General Electric Corp. (NYSE: GE) in connection with the signed definitive agreement to form a jo
40、int venture that will be 51 percent owned by Comcast (NASDAQ: CMCSA, CMCSK), 49 percent owned by GE and managed by Comcast. The announcement was made on December 3, 2009. The transaction has been approved by the Board of Directors of GE and Comcast. It is subject to receipt of various regulatory app
41、rovals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and approvals of the Federal Communications Commission and certain international agencies. The transaction is also subject to other customary closing conditions. NBCU has obtained $9.85 billion of committed financing
42、 through a consortium of banks led by J.P. Morgan, Goldman Sachs, Morgan Stanley, BofA Merrill Lynch and Citi. Important Disclosures for Equity Research Compendium Reports: Important disclosures, including price charts for all companies under coverage for at least one year, are available through the
43、 search function on J.P. Morgans website https:/ or by calling this U.S. toll-free number (1-800-477-0406) 47 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 0 12 24 36 48 60 72 Price($) Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec
44、09 Mar 10 Jun 10 Sep 10 Danaher (DHR) Price Chart N $35OW $47 N $27N $31.5N $41.5 OW OW $23N $21.5N $30N $37.5OW $48 Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. This chart shows J.P. Morgans continuing coverage of this stock; the current analyst may or may
45、not have covered it over the entire period. J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight. Date Rating Share Price ($) Price Target ($) 30-Jul-07 OW 38.32 - 09-Dec-08 OW 24.89 23.00 01-Apr-09 N 27.11 21.50 12-May-09 N 30.21 27.00 08-Sep-09 N 32.88 30.00 14-Oct-09 N 34.82 31.50
46、21-Dec-09 N 37.58 35.00 07-Jan-10 N 37.91 37.50 30-Mar-10 N 40.44 41.50 07-May-10 OW 39.90 47.00 17-Aug-10 OW 37.20 48.00 0 15 30 45 60 75 Price($) Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 General Electric Co. (GE) Price Chart N $8OW $20 N $9OW $17OW $21 N N $13N $12OW $17 OW $22OW $23 Source: Bloo
47、mberg and J.P. Morgan; price data adjusted for stock splits and dividends. This chart shows J.P. Morgans continuing coverage of this stock; the current analyst may or may not have covered it over the entire period. J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight. Date Rating Shar
48、e Price ($) Price Target ($) 16-Jun-08 N 28.97 - 09-Dec-08 N 17.78 13.00 06-Feb-09 N 10.85 9.00 10-Mar-09 N 8.87 8.00 12-May-09 N 14.19 12.00 08-Sep-09 OW 13.87 17.00 19-Oct-09 OW 15.84 17.00 16-Dec-09 OW 15.69 20.00 07-Jan-10 OW 16.25 22.00 19-Apr-10 OW 18.94 23.00 17-Aug-10 OW 15.58 21.00 48 North America Equity Research 26 August 2010 C. Stephen Tusa, Jr CFA (1-212) 622-6623 0 18 36 54 72 90 108 Price($) Oct 06 Jul 07 Apr 08 Jan 09 Oct 09 Jul 10 Honeywell (HON) Price Chart N $26N $38 N $21N $36 N N $22N $31N $45 OW $53 Source: Bloomberg and J