HARTFORD, Conn.--()--Corbin Advisors, a strategic consultancy accelerating value realization globally, today released its quarterly Industrial Sentiment Survey®. The survey, part of Corbin Advisors’ Inside The Buy-Side® flagship research publication, was conducted from December 13, 2024 to January 10, 2025, and is based on responses from 34 institutional investors and sell-side analysts globally who actively cover the Industrial Sector. Participating buy-side firms manage ~$2.1 trillion in assets with ~$247 billion invested in Industrials, collectively.

Following last quarter’s survey, which found diverging views and a significant uptick in bearish sentiment as investors braced for misses and lower annual guidance, the Voice of Investor® captured in this survey reveals growing optimism about 2025 and a renewed focus on growth. However, expectations for sequential improvement remain subdued, with order trends and policy shifts dominating the agenda for upcoming earnings calls.

Over 60% of investors characterize their sentiment as Bullish or Neutral to Bullish, a notable increase from 40% last quarter, while downbeat views have dropped significantly, to under 10% from 30%. An increasing number, 44%, describe executive tone as Bullish or Neutral to Bullish, up from 27% QoQ, with just 6% painting management as Neutral to Bearish or Bearish, down from 35%. Notably, investors are ahead of executives in terms of increasing optimism.

“Fourth quarter results are anticipated to largely be in line sequentially and with consensus, albeit better year-over-year, amid views of muted demand during the period, but Industrial investors are already looking ahead to 2025 with increasing optimism and a sharpened focus on growth opportunities,” said Rebecca Corbin, Founder and CEO of Corbin Advisors. “Despite emerging and persistent challenges such as tariffs, inflation, and policy uncertainties, confidence is building around stronger annual guidance for both revenue and earnings. Reinvestment remains the leading preferred use of cash, now just two points shy and within striking distance of its 5-year high in mid-2021, with appetites for M&A growing and eclipsing debt reduction as investors pivot toward strategies for long-term, sustainable growth. Pace of growth, however, remains the sector’s biggest question mark, with investors keenly focused on whether corporate realities — and forecasts — can keep pace with elevated annual expectations. Tariff uncertainty will remain a limiting factor.”

With regard to Q4, a majority, 58%, anticipate sequential performances to be In Line, while only 25% expect Better Than results, a decline from 38% last quarter. Additionally, at least 40% expect QoQ results to remain flat across Revenue, EPS, Margins, and FCF, with nearly three-quarters predicting results will Meet consensus estimates — the highest level observed in 11 quarters.

“The first half of 2025 should see a disappointment relative to current expectations. Management teams have universally said no improvement has been seen in Q4’24, and they will likely guide in-line to lower when improvement is widely anticipated,” commented a portfolio manager whose firm has over $206M invested across the Industrial sector.

Looking ahead to full-year 2025, expectations are more optimistic. While most anticipate annual Margin and FCF forecasts to be In Line with 2024, at least half expect Higher Revenue and EPS guidance compared to last year’s actuals. Supporting this positive outlook, two-thirds of investors believe 2025 Industrial organic growth will exceed 2024 levels, with 80% anticipating a post-election rebound in orders. As a result, 73% prioritize growth over margins at this time, a stark reversal from just 39% supporting growth last quarter, and the highest level registered in over a year.

However, pre-election ambiguity has been replaced by post-election jitters. Investors highlight Policy Uncertainty and Tariffs as top concerns this quarter, followed closely by Inflation, which sees a 20-point increase QoQ. Regarding the latter, while a majority, 64%, expect Inflation to Stay the Same over the next six months, calls for Worsening conditions increases to 27%, up from 17% in Q3.

Reinvestment remains the leading preferred cash usage, rising to 80% from 55% QoQ. M&A, now cited as the second-preferred capital allocation priority by 37%, leapfrogs debt paydown (28%). Indeed, those Favoring or Highly Favoring bolt-on acquisitions are now at 100%, the highest recorded level in two years, while those Not In Favor of large / transformational deals recedes to 10% from 37% QoQ.

A majority, 54%, report being Net Buyers up slightly from 50% last quarter. Bolstering this perspective is the view that 64% expect Global Capex to Improve over the next six months, up 18% QoQ, while 73% say the same for Global PMI, a 19% increase.

“My sentiment toward Industrials is bullish, but you have to pick your spots. It is a real stock picker’s market,” commented a portfolio manager whose firm has over $22B invested across the Industrial sector.

Regarding sub-sector views, Commercial Aeros sees the most significant increase in bullish sentiment, followed by Industrial Equipment, Water, and Materials. While Defense remains a bright spot, bulls ebb and bears flow amid a D.O.G.E. overhang. Conversely, concerns over interest rates drive a sharp rise in bearish sentiment for Non-Resi Construction and Building Products, while Auto, Agriculture, and Transportation remain the most downbeat.

About Corbin Advisors

Since 2007, Corbin Advisors has tracked investor sentiment on a quarterly basis. Access Inside The Buy-Side® and other research on real-time investor sentiment, IR best practices, and case studies at CorbinAdvisors.com.

Corbin is a leading investor research and investor communications advisory firm accelerating value realization globally. We engage deeply with our clients — companies ranging from pre-IPO to over $500 billion in market cap across all sectors globally — to increase equity market value. We deliver research-based insights and execution excellence through a cultivated and caring team of experts with deep sector and situational experience, a best practice approach, and an outperformance mindset. We have a long track record of delivering successful client outcomes, most notably through rerating and compounding equity valuations through our Voice of Investor® research and counsel.

Inside The Buy-Side®, our industry-leading research publication, is covered by news affiliates globally and regularly featured on CNBC.

To learn more about us and our impact, visit CorbinAdvisors.com