J.P. Morgan Highlights Elevator Stocks for Defensive Growth Amid Weak 2026 Outlook

Overview of Elevator Stocks#

European elevator stocks are gaining attention from investors, even as major companies in the sector have provided less-than-encouraging guidance for 2026. J.P. Morgan believes that the defensive growth qualities of these stocks make them appealing in a fluctuating economic environment.

Schindler's Performance#

Schindler, a Swiss company specializing in elevators and escalators, reported mixed results for the fourth quarter. While their order numbers met expectations, their profit margins improved to 13.5%, which is a 1% increase from the previous year. However, management's forecast of low-to-mid single-digit sales growth and a reported profit margin of 12% for the full year was deemed disappointing by J.P. Morgan. Despite this, the brokerage rates Schindler as "overweight" with a target price of CHF 340, suggesting a potential 16% increase from current levels due to its defensive characteristics.

Kone's Strong Order Intake#

Kone, a Finnish competitor, had a stronger performance in the fourth quarter, achieving a book-to-bill ratio of 1.40, the best in the sector. They guided for sales growth of 2-6% and an adjusted profit margin of 12.3-13% for 2026. J.P. Morgan maintains a "neutral" rating on Kone with a target price of €65, which is roughly aligned with its current share price. Although the guidance was disappointing, the strong order intake offers some reassurance for near-term revenue.

Other Key Players#

Assa Abloy, a Swedish company focused on access solutions, reported a 4% organic sales growth in Q4 with margins of 16.8%. J.P. Morgan rates it as "overweight" with a target price of SKr 430, indicating a 13% upside, bolstered by the recovery in European residential construction. Rexel, a distributor of electrical supplies, also reported a 4% sales growth in the second half of 2025 and expects 3-5% growth in 2026. J.P. Morgan rates Rexel as "overweight" with a target price of €41.8, suggesting a 16% upside as it aligns with the recovery in both residential and non-residential construction.