Machinery downside as capex digs deeper; Metso to CL-Sell; Atlas Sell; initiate on Sandvik
* 2016 kicks off the Capex Tracker downturn
* Capex names to derate to pre-supercycle levels as earnings continue to slide
* Focusing on returns upside without growth
* Machinery: Metso to CL-Sell, Atlas Copco to Sell; initiate on Sandvik at Neutral
We add Metso to CL-Sell and Atlas Copco to Sell (both from Neutral) on concerns around further top-line pressure driving lower returns. Our Buyrated names are Weir/SKF. With this note, Jonathan Hanks assumes primary coverage of Atlas Copco and Alfa Laval.