WAB - Morgan Stanley gets tactical with picks for Machinery's third-quarter season

With supply-chain issues weighing on the macroeconomic recovery, investors are set for negative EPS revisions in industrial machinery, Morgan Stanley says - but it adds that price performance through year-end will be company-specific, largely depending on individual guidance positioning through the third-quarter earnings season. For example, there's been "vastly different" share price reactions to the guidance cuts over the past month at PACCAR (NASDAQ:PCAR), Timken (NYSE:TKR) and Oshkosh (NYSE:OSK), analysts Courtney Yakavonis, Dillon Cumming and team write. And the firm thinks investors may be leaning long on the Truck names, seeing this round as the "last cut" to estimates (but noting PACCAR's initial 2022 guidance may point to the extent that supply-chain issues could continue hurting truck sales). In the end, "companies that choose to 'kitchen sink' C3Q EPS and resulting guidance revisions" - for example, Oshkosh (OSK) - "may be better positioned through (year-end) vs. companies that may choose

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Morgan Stanley gets tactical with picks for Machinery's third-quarter season