EMR, FTV, MMM, DHR poised to win from Trump’s lower taxes, analyst says

• U.S.-based industrial companies such as Emerson Electric (NYSE:EMR), Fortive (NYSE:FTV), 3M (NYSE:MMM) and Danaher (NYSE:DHR) could enjoy sizable benefits from potential tax changes that could occur next year, as well as increased capital spending, Bernstein analyst Steven Winoker writes.
• The potential EPS upside of U.S. tax reform should reach double digits for the four companies, while Eaton (NYSE:ETN) - already at a group-low ~10% global effective tax rate - should see only minimal upside, according to Winoker, who notes that tax deductibility of capex investment also would spark spending in the U.S.
• Bernstein's covered companies derive between 10% (3M) and 60%-plus (Rockwell Automation (NYSE:ROK)) of revenues from customers’ capex spending, so the impact could be meaningful; the firm rates Allegion (NYSE:ALLE), DHR, Dover (NYSE:DOV), FTV, Honeywell (NYSE:HON), Ingersoll-Rand (NYSE:IR), Johnson Controls (NYSE:JCI) and Pentair (NYSE:PNR) at Outperform, with EMR, ETN, General Electric (NYSE:GE), Idex (NYSE:IEX), MMM and ROK at Market Perform.