Momentum continues to build for the Trump-led “reshoring” of industrial production back to the U.S., Morgan Stanley analysts declared. The firm on Wednesday named Eaton Corp. and Rockwell Automation as its top stocks to play the reshoring theme. Eaton stock broke out on Thursday.
Besides Eaton and Rockwell, the Morgan Stanley analyst report named Hubbell, Trane Technologies, Fastenal and Emerson Electric as other top beneficiaries of U.S. reshoring activities.
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Trump Ignited U.S. Reshoring ‘Flame’
“The flame was first lit in 2018 as Trump tariffs kick-started boardroom conversations around global supply chains for the first time in 40 years and brought noticeable change,” the firm’s industrials analyst team led by Christopher Snyder wrote in an 87-page research note on Wednesday.
The report, coming ahead of the 2024 U.S. elections, pointed to several other factors driving the reshoring theme besides former president and presidential candidate Donald Trump.
The Covid-19 pandemic further spurred economic disruption by highlighting the costs of “rigid” global supply chains, the Morgan Stanley analysts said. As a result, many countries including the U.S. began a push to return manufacturing from countries like China to their own shores, a process commonly known as reshoring.
team thinks especially highly of Trane Technologies stock, which lands on the IBD 50 list of top growth stocks.
Reshoring Stocks
Eaton stock seized a 345.19 buy point in Thursday’s stock market trading. The maker of electric power and control systems has jumped 44.5% this year to record highs. The IBD Stock Checkup tool shows Eaton averaged 25% earnings growth over the last three quarters, above the three-year rate of 18%.
Rockwell stock nudged lower on Thursday. Shares of the industrial automation company are testing the 200-day moving average after finding support at the 50-day line. But Rockwell is in a downturn going back to July 2023.
Hubbell stock is slightly extended from a recent consolidation. Trane Technologies stock hasn’t had a proper base all year as it marches higher, but is in range of a three-weeks-tight pattern.
Fastenal stock raced above a 72.49 cup-with-handle buy point on Oct. 11 following earnings. Shares are moving toward a record high.
Emerson Electric stock is slightly below a cup-with-handle buy point.
