European Capital Goods: Takeaways from the Q1 earnings season

Research evidence excerpt

European Capital Goods: Takeaways from the Q1 earnings season

Deutsche Bank

Research

Europe Industry Date

17 May 2026

Capital Goods European Capital

Industry Update

Goods

Takeaways from the Q1 earnings season

Gael de-Bray, CFA

This report compiles charts and observations from the Q1 earnings season. By

Research Analyst

geography, we observed sequential improvement in the US and China, partly +33-1-4495-6562

offset by a deterioration in the Middle East and Latin America. By segment, the

datacenter and power sectors continued to deliver the strongest growth rates, John Kim

while short-cycle industrial businesses improved only modestly in Q1. Despite

+44-20-754-18699

the conflict in the Middle East, global manufacturing activity accelerated in April,

with the aggregate manufacturing PMI up +1.3pts MoM to 52.6. Siemens' Nabil Najeeb

automation business also showed stronger growth in April, ahead of the group's Research Analyst

internal estimates. Inflation is back, with both global input and output price +44-20-754-17410

indices rising to their highest levels since June 2022, reaching 66.3 (vs. 62.3 in Christophe Menard

March) and 58.0 (vs. 55.1 in March) respectively. Many industrial companies Research Analyst

commented that they’ve been putting through incremental pricing in April to +33-1-4495-9315

cover rising commodity and energy costs, with the net value gap expected to be Seetharaman Ramakrishna

positive in H2. Our preferred stocks are Siemens Energy, Schneider, Knorr- Research Associate

Bremse, Prysmian, Nexans, Nordex, Kion and Sandvik.

Lars Vom-Cleff

Strong order momentum Research Analyst

11 out of 15 companies beat on Q1'26 orders, primarily ABB (16% above +49-69-910-13526

consensus) and Siemens Energy (+14%), while 3 missed, including Vestas (-5%)