US Equity Strategy Industrials Conference 2024 – Strategy V...-110274272

Morgan Stanley Laguna Industrials Conference Andrew Pauker, US Equity StrategyAdam Jonas, Autos & Shared MobilityAngel Castillo, Machinery Carlos de Alba, Metals & MiningChris Snyder, Multi-IndustryKristine Liwag, Aerospace & DefenseRavi Shanker, Transportation & AirlinesVincent Andrews, ChemicalsDISCLOSUREMorgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section.September 11th, 2024September 11, 2024 04:01 AM GMTAndrew PaukerEquity Market Overview and Industrials Sector ViewsUS Equity Strategy212-761-1330Andrew.Pauker@morganstanley.com3September 11, 2024Key Macro Data Indicate We’re in a Later Cycle Backdrop – Supportive of Quality LeadershipSource: Bloomberg, Morgan Stanley Research.4September 11, 2024Price Divergence from Fundamentals Is A Later Cycle Dynamic As Market Focuses on a Policy ShiftSource: Bloomberg, FactSet, Morgan Stanley Research.5September 11, 2024S&P 500 Performance Is Historically Mixed Post the Start of Fed CutsSource: Bloomberg, Morgan Stanley Research.6September 11, 2024Operational Efficiency Is Driving Earnings Growth and PerformanceSource: FactSet, Compustat, Morgan Stanley Research.7September 11, 2024Industrials Tend to Outperform Consumer Cyclicals Mid-to-Late CycleSource: Compustat, Morgan Stanley Research.8September 11, 2024Industrials Relative Valuation Is in Line with Historical MedianSource: FactSet, Morgan Stanley Research.Aerospace & DefenseBuilding ProductsConstruct. & Engin.Electrical EquipmentIndustrial Conglom.MachineryTrading Cos. & Distrib.Comm. Services & SuppliesProfess. ServicesAir Freight & Logist.Passenger AirlinesGround TransportIndustrialsFwd. P/E25.320.926.023.417.717.220.432.625.515.17.223.620.9Abs. % Rank99%70%96%88%54%70%64%97%92%30%23%95%87%Rel. % Rank95%46%82%65%3%14%54%91%69%7%18%94%56%Industrials Subgroup Valuation9September 11, 2024Industrials Earnings Revisions Have StabilizedSource: FactSet, Morgan Stanley Research.10September 11, 2024Industrials Stock Specific Risk Remains ElevatedSource: Compustat, Morgan Stanley Research. 3M Avg.Adam JonasUS Autos & Shared Mobility: Tesla (TSLA)US Autos & Shared Mobility 212-761-1726Adam.Jonas@morganstanley.com12September 11, 2024SOTP ValuationSource: Morgan Stanley Research 19.1% 15.7% 1.5% 20.0% 30.9% 12.9% Tesla Auto (Core)Tesla EnergyTesla InsuranceTesla Mobility/ride-sharingTesla Network Services (net)EV P-train 3rd partyBase CaseTesla Auto (Core)$59 Tesla Energy$49 Tesla Insurance$5 Tesla Mobility/ride-sharing$62 Tesla Network Services (net)$96 EV P-train 3rd party$40 Total$310 13September 11, 2024Tesla Energy Worth More Than Tesla Auto?-5%0%5%10%15%20%25%30%2020 202