Goldman Analysts Sector-by-Sector Outlooks for 2017

Aerospace & Defense (Noah Poponak): Expect more outperformance of defense over aerospace; still sees challenge with OE supply at all time high and with replacement demand slowing sharply alongside fuel price (most exposed BA, SPR, TGI, HXL)

Autos (David Tamberrino): Remain cautious as shares are likely to underperform; expect "underwhelming guides" at Detroit Auto Show with biggest disappointments likely at GM and HTZ while CPS and MGA may surprise to the upside

Machinery, Engineering & Construction (Jerry Revich): Buy machinery amid end market inflection and margin upside (top picks TRMB, CMI, CAT, ALSN, DE, TEX); remains neutral on E&Cs given limited scope for backlog growth; selective on construction materials, prefers VMC to USG

Capital Goods (Samuel Eisner): Becoming more selective in building products and sees incremental reasons to be more positive on SMID Cap Goods; downgrades FBHS to neutral from buy and removes buy-rated MAS from conviction list

Multi-Industry (Joe Ritchie): Cyclicals to remain outperformers; add buy-rated HDS to conviction list with PT $50 on valuation and option value from Trump proposals/portfolio actions, replacing buy-rated JCI

Agriculture (Adam Samuelson): Farm economics set to remain constrained, though rebalancing across value chain to continue; top picks TSN, GPRE, BG, DAR and remains on sidelines for fertilizer stocks

Metals & Mining (Andrew Quail): Expect more normalized year after a "somewhat eventful" 2016; sector positioned as longer term investment and no longer a trade; still prefers met coal, zinc and gold exposure (buy-rated ABX and NEM) over iron ore, aluminum and PGMs

Chemicals (Robert Koort): Upgrades FMC to buy from neutral, boosts PT to $70 from $54 and adds to conviction list given high-graded ag portfolio, lithium exposure and improving balance sheet; upgrades GRA to buy from neutral, raises PT to $83 from $80 after weak 2016; downgrades TiO2-exposed CC and HUN to neutral from buy after strong runs in 2016

Packaging, Paper & Forest Products, Waste (Brian Maguire): Outlook most differentiated vs Street around coming benefits to BERY and SEE from polyethylene resin shifting to oversupply position; both stocks are top picks alongside WY, GPK and WCN

Medtech (Isaac Ro): Downgrading Life Science Tools sector view to neutral from attractive as biopharma R&D spend decelerating, may be disrupted by pickup in M&A; upgrades Labs view to attractive and raises DGX to buy; adds buy-rated HOLX to conviction list, removes buy-rated TMO

Related tickers:
BA US (Boeing Co/The)
BERY US (Berry Plastics Group Inc)
CAT US (Caterpillar Inc)
CC US (Chemours Co/The)
DGX US (Quest Diagnostics Inc)
FBHS US (Fortune Brands Home & Security Inc)
FMC US (FMC Corp)
GM US (General Motors Co)
GRA US (WR Grace & Co)
HDS US (HD Supply Holdings Inc)
HOLX US (Hologic Inc)
HUN US (Huntsman Corp)
JCI US (Johnson Controls International plc)
MAS US (Masco Corp)
NEM US (Newmont Mining Corp)
TMO US (Thermo Fisher Scientific Inc)

Bloomberg

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