The S&P/ASX 200 Industrials Index (ASX: XNJ) is trending higher again today, up another 0.38% as of 11:30 am. Over the past year, the index has risen an impressive 19.45%.
For investors who want to get in on the action, Macquarie Group Ltd (ASX: MQG) has revealed its top picks for the sector.
"With elevated risks during the reporting season, we emphasise defensive positioning, favouring quality growth stocks on lower multiples," the broker said.
Here are five ASX industrials stocks that the broker thinks are primed for quality growth.
Bluescope Steel Ltd (ASX: BSL)
Bluescope Steel is an Australian-based steel manufacturer supplying global markets. It was spun out of BHP Billiton in 2002.
Like the ASX industrials index, the Bluescope share price is a little lower today. As of 11:30 am, it is down 0.29% to $24.29. Over the year, however, it is 12.35% higher.
Macquarie has an outperform rating and a $29.05 target price on the shares. At the time of writing, this represents a potential 19.6% upside for investors over the next 12 months.
Here's what the broker has to say about the stock:
The US steel environment has tightened, driven by tariff imposition. Steel price support has been good given the demand complexity. The group is also positioned to benefit from Australian A&A-driven painted volumes. These factors underpin our estimates, which are 16% ahead of consensus expectations for 1HFY26 EBIT.
Amcor PLC (ASX: AMC)
Amcor is an international plastics packaging giant spanning more than 40 countries.
The Amcor share price is in the green as of 11:30 am today. The stock is changing hands 0.61% higher at $14.83. Over the year, Amcor shares are trading 6.73% lower.
Macquarie has an outperform rating and $18.14 target price on the shares. This represents a 22.3% potential upside for investors over the next 12 months, at the time of writing.
Here's what the broker has to say about the stock:
9% EPS CAGR over next 4 years at an attractive valuation. Berry integration success is the key tenet of our thesis and there's asset sale potential to improve margins/returns and lower gearing.
Brambles Ltd (ASX: BXB)
Brambles is the world's largest supplier of reusable wooden pallets and crates used for storing and transporting goods.
The Brambles share price is also in the green. As of 11:30 am, shares are 1.2% higher at $23.61. Over the year, the share price is 54.31% higher.
Macquarie has an outperform rating and $24.60 target price on the share. This represents a potential 4.2% upside for investors over the next 12 months, at the time of writing.
Here's what the broker has to say about the stock:
We think FCF outcomes remain well-supported. Market conditions are relatively stable, with the prospect of some slow improvement. BXB's new business momentum will be a key focus.
SGH Ltd (ASX: SGH)
SGH is an Australian diversified operating company with businesses across industrial services, energy and media.
The SGH share price is 0.97% at $52.21 as of 11:30 am. For the year, SGH shares are changing hands 36% higher.
Macquarie has an outperform rating and a $59.20 target price on the shares. At the time of writing, that represents a potential upside of 13.4%.
Here's what the broker has to say about the stock:
EPS momentum has weakened in recent weeks, following a wet June which would have hampered Boral performance. We still like the prospect of solid growth into FY26, underpinned by Westrac (product support) and Boral (resi recovery and efficiencies).
The Reliance Worldwide Corp Ltd (ASX: RWC)
Reliance Worldwide is an Australian-owned company that designs and manufactures branded plumbing and heating products sold internationally.
The company's share price is flat as of 11:30 am today. The stock is changing hands at $4.31 a piece. Over the year, the share price is 14.99% lower.
Macquarie has an outperform rating and a $5.55 target price on the shares. At the time of writing, that represents a potential upside of 28.8% for investors over the next 12 months.
Here's what the broker has to say about the stock:
Operational execution and cost-out will be in focus, supporting strong operating leverage in the recovery. Trade policy issues are abating slowly, but a China-US deal remains key.
