Elevator Stocks Shrug Off Weak Guidance, JPMorgan Bullish on Defensive Value in Recovery

Investing.com – Despite disappointing guidance from two major companies for 2026, European elevator stocks remain a top priority for investors. JPMorgan believes the defensive growth characteristics of this sector make it increasingly attractive in a volatile macro environment.

Schindler, the Swiss elevator and escalator group, had mixed results in the fourth quarter. Orders met expectations, but profit margins slightly exceeded expectations, reaching 13.5%, up 100 basis points year-over-year.

Management provided a low to mid-single-digit sales growth guidance at constant exchange rates for the full year, with an EBIT margin of 12%. JPMorgan described this as disappointing.

Nevertheless, the bank still rates Schindler as “Overweight,” with a target price of 340 Swiss francs, implying a 16% upside from current levels. It values the stock’s defensive features and relative valuation appeal amid uncertain macro conditions.

Kone, the Finnish competitor, exceeded expectations in the fourth quarter with an order-to-shipment ratio of 1.40, the strongest performance in the sector. It provided a 2026 sales growth guidance of 2-6% and an adjusted EBIT margin of 12.3-13%.

JPMorgan maintains a “Neutral” rating with a target price of €65, roughly in line with the current stock price. Although the guidance is also disappointing, strong order volume offers some visibility into recent revenue.

Assa Abloy, the Swedish access solutions group, has expanded into this vertical, with broader exposure to residential and non-residential buildings beyond just elevators. The company reported 4% organic sales growth in Q4, with a profit margin of 16.8%, up 33 basis points year-over-year.

JPMorgan rates it as “Overweight,” with a target price of 430 SEK, representing a 13% upside. It is marked as one of the broker’s preferred stocks entering 2026, supported by the ongoing recovery in European residential construction, which has turned positive.

Rexel, a major electrical supplies distributor with significant exposure to the construction sector, also falls into this theme.

The French group reported 4% organic sales growth in the second half of 2025 and provided a guidance of 3-5% sales growth for 2026, with an adjusted EBIT margin of about 6.2%.

JPMorgan rates it as “Overweight,” with a target price of €41.8, offering a 16% upside, viewing it as a direct bet on the recovery of European residential and non-residential construction.

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