Societe Generale sees strong catalysts for reshoring in 2026. These names could benefit

Societe Generale anticipates a strong year for "reshoring stocks," citing three key catalysts: new legislation providing 100% bonus depreciation for qualified properties after January 2025, $8.9 trillion in announced U.S. investments, and an expected acceleration in non-residential construction spending as the Federal Reserve lowers rates. The firm's SG US Reshoring thematic equity index, which recently added names like Nucor and Ameren, targets S&P 500 companies with significant U.S. revenue and exposure to critical industries, positioning them to capitalize on increased domestic investment and infrastructure development.

Analysis

Societe Generale forecasts a strong outlook for reshoring stocks, driven by three key catalysts for 2025. The "One Big Beautiful Bill," signed in July, introduces 100% bonus depreciation for qualified properties acquired after January 2025, reversing prior phasedown schedules and offering immediate tax savings and improved corporate cash flow. This legislative support is complemented by $8.9 trillion in announced U.S. investments and an anticipated acceleration in non-residential construction spending, which is currently at a cyclical low and expected to benefit from future Federal Reserve rate cuts.

The firm's SG US Reshoring thematic equity index targets S&P 500 companies with significant U.S. revenue exposure and sensitivity to non-residential investment growth, particularly in critical sectors like semiconductors, AI, and energy. While the overall theme is optimistic, individual company performance within the index is mixed.

Nucor (NUE) and Ameren (AEE), both recent additions, demonstrated strong Q3 results, with Nucor benefiting from data center construction demand and Ameren raising its 2025 EPS guidance. Conversely, Eaton (ETN) and Emerson Electric (EMR) reported recent earnings and revenue misses, with Emerson's full-year EPS guidance also falling short of consensus, indicating the importance of selective stock picking within the broader theme.

Key Decisions for Investors

• Investors should consider strategic allocations to companies poised to benefit from the 100% bonus depreciation and the $8.9 trillion in announced U.S. investments, particularly those with high domestic revenue exposure.
• Prudent investors should conduct thorough due diligence on individual reshoring stocks, as recent earnings reports indicate mixed performance despite the positive macro theme, favoring companies like Nucor and Ameren with strong recent results and positive guidance.
• Monitor the implementation of the "One Big Beautiful Bill" and the Federal Reserve's interest rate policy, as these are critical drivers for non-residential construction spending and the overall reshoring trend.