Weir Group PLC (LSE:WEIR) is one of UBS’s top picks as the second quarter reporting season for European capital goods gets underway.
While UBS expects the period to be broadly in line with forecasts, there are a few bumps ahead, particularly from short-cycle trading and currency swings.
Mining looks like a bright spot. After a solid pick-up in original equipment orders late last year and strong momentum since, Weir stands to benefit from high commodity prices, especially for copper and gold.
This gives the group a constructive outlook as miners continue to invest in new equipment.
Elsewhere, the broader industrial recovery is steady but cautious.
Trade tensions and tariffs have pushed some cyclical improvements back, and the North American truck market remains weak, weighed down by cost pressures and currency headwinds. T
here may be some upside in European truck orders, but UBS expects a generally soft quarter in this segment.
On the positive side, pricing adjustments driven by US tariffs are expected to boost organic growth by 1-2% for several companies, including Weir. While this is mostly a pass-through with limited profit impact, it’s a welcome lift to sales.
Overall, UBS sees Weir well-positioned thanks to its exposure to mining and the pricing power to navigate challenging markets.
The shares were off 1% at 2,505p.