Shares of 3M and Emerson Electric were recently lower.
Despite downgrading 3M to "sell," the Goldman analysts increased their price target on the stock to $87 from $82 and on Emerson Electric to $54 from $51.
Even though key macroeconomic questions remain, Darling says the Goldman team is encouraged that the European Central Bank's liquidity actions in December and recent manufacturing data will increase risk-taking in the first half of 2012.
As part of the team's plan to be tactically constructive, the analysts upgraded industrial automation company Rockwell Automation and construction-equipment maker Graco to "buy" from "neutral" and "sell," respectively.
Additionally, Darling and the Goldman team see increased risk-taking in early 2012 as also benefiting power-management company Eaton, which is on the investment bank's Conviction Buy List and is what Darling calls "a classic 'laggard to leader' candidate." Goldman also has manufacturing components maker Dover rated as a "buy" and the bank counts Dow member General Electric as its "favorite super-cap for a combination of offense (visible late cycle industrial growth, declining credit losses) and defense (dividend yield)."
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