Jefferies’ most recent equity note on European capital goods finds that analysts remain broadly positive across the sector, with buy recommendations outnumbering other ratings across the broker’s coverage universe.
Across the full set of companies Jefferies tracks, 'buy' ratings comprised 61.19% of analyst recommendations over the past 12 months. 'Hold' recommendations made up 34.24% of coverage, while 'underperform' ratings accounted for 4.58%.
When the focus narrows to Europe-oriented market services coverage, the bias toward buys is less pronounced but still present: buys represent 17.04% of coverage, holds 8.99% and underperform ratings 1.23%. A comparable distribution appears in Jefferies’ JIL market services coverage, where buys were 5.17%, holds 1.24% and underperform 1.23%.
Despite the overall constructive tilt, Jefferies has adjusted ratings lower for several short-cycle industrial names in light of what the firm describes as weak underlying industrial data and an absence of clear recovery in European manufacturing activity. Specifically, SKF and Kion were downgraded to 'underperform' and Sandvik was lowered to 'hold'. The report highlights that volumes in some short-cycle segments remain 15% to 20% below 2018 levels, and that manufacturing purchasing managers’ indexes continue to signal contraction.
Even with those downgrades, buy-rated stocks remain prominent on Jefferies’ preferred list for 2026. The brokerage lists Legrand, Siemens, Siemens Energy, Prysmian, NKT, Assa Abloy, Epiroc and Schindler as top picks, each carrying a 'buy' rating and published price targets denominated in local currencies.
Within the broader European capital goods coverage, several large-cap industrial and electrification groups also retain 'buy' ratings, including Schneider Electric, Siemens AG and Siemens Energy.
'Hold' ratings are clustered where valuation considerations or mixed end-market exposure temper the investment case. Companies noted under this grouping in Jefferies’ ratings table include Sandvik, Kone, Nexans, Rexel and Rio Tinto.
Contextual note: The data points and company ratings above are drawn directly from Jefferies’ distribution of analyst recommendations and its latest changes to coverage within European capital goods. The report underscores the contrast between a buy-heavy ratings distribution and selective caution in parts of the short-cycle industrial segment.