Oppenheimer updated its coverage of several industrial and components names, elevating W.W. Grainger and TE Connectivity to Outperform while trimming Emerson Electric and AMETEK to Perform.
The firm said its decision reflects an outlook for stronger organic growth from Grainger and TE Connectivity across 2026 and 2027 compared with Emerson and AMETEK, and it reshuffled ratings accordingly.
Grainger was promoted to Outperform with a $1,250 price target. That target is derived from a multiple of 25 times projected 2027 earnings. Oppenheimer highlighted Grainger's ability to outpace the U.S. maintenance, repair, and operations (MRO) market by approximately 4% to 5% annually, a dynamic the firm says has been reinforced through 2025 and leaves the company well positioned into 2026.
The analysts also pointed to an expected improvement in pricing realization, projecting it to rise above 4% after being near 1% in 2025. They cited a favorable gross margin reversion setup as an additional source of margin support. Oppenheimer further noted that Grainger's adoption of artificial intelligence is already producing tangible gains, including several hundred basis points of improved fulfillment efficiency.
TE Connectivity was likewise upgraded to Outperform, with a $270 price target based on 22 times projected 2027 earnings. The research team observed that shares had retreated from recent highs even as the company's execution continued to improve.
Oppenheimer emphasized TE's exposure to several end-markets it views as attractive: AI-driven data center expansion, growing investment in electric grid infrastructure aided by the Richards acquisition, and supportive trends in commercial vehicles, factory automation, and aerospace and defense. The note acknowledged mixed automotive production trends, especially in China, but described autos as a limited driver for TE given the company's positioning tied more to data, electrification, and e-mobility.
By contrast, Emerson Electric and AMETEK were downgraded to Perform. The firm said Emerson shares sit within roughly 2% of its prior $152 target, with anticipated growth weighted toward the second half of fiscal 2026. AMETEK shares, the firm noted, are trading within about 5% of its prior $230 target and at approximately 26 times projected 2027 earnings, a level Oppenheimer regards as consistent with the company's long-term valuation range.
The adjustments reflect a valuation and growth differentiation across these industrial names as viewed by Oppenheimer, with Grainger and TE Connectivity seen as having clearer near-term growth and efficiency catalysts, and Emerson and AMETEK judged to be nearer to fully priced levels relative to the firm's models.