Atmus Filtration Applied sciences Inc. ATMU has robust development potential, pushed by its capacity to develop in core and adjoining markets, based on JPMorgan analyst Tami Zakaria.
On Thursday, Zakaria raised the inventory’s worth forecast from $44 to $46, and maintained an Obese ranking.
Zakaria writes that with regular money flows and a powerful steadiness sheet, the corporate is well-positioned to enter the broader industrial filtration market via strategic acquisitions.
Regardless of incomes over 80% of its income from the aftermarket, Atmus Filtration’s valuation is at the moment discounted in comparison with its friends. The analyst notes that the corporate’s deliberate transfer into industrial filtration is anticipated to slim this valuation hole over time. This can convey it consistent with direct filtration opponents.
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Within the close to time period, administration is assured in its capacity to offset any potential value will increase from tariffs by adjusting costs within the aftermarket if present exemptions are eliminated after April 2.
Atmus Filtration intends to counter any tariff-related value hikes via versatile pricing changes, notifying prospects of potential worth modifications if broad tariffs with out present exemptions.
Whereas the doable cancellation of the 2027 NOx regulation is unlikely to have a major impact on this yr’s trade outlook, it might result in a extra balanced manufacturing schedule over the subsequent few years, the analyst provides.
Per Zakaria, Atmus Filtration expects the NOx regulation to nonetheless go into impact, although the prolonged guarantee requirement could be eradicated.
Wanting forward, administration is concentrated on driving natural income development at a fee of roughly 4%, which is anticipated to generate a 25% incremental margin. Additional development potential comes from vital wins with main OEMs and acquisitions within the industrial filtration market.
Primarily based on this, Zakaria adjusted estimates upward as a result of newest overseas alternate charges.
Value Motion: ATMU shares are buying and selling decrease by 0.33% to $37.88 eventually test Thursday.
Learn Additionally:
Momentum79.22
Development46.29
High quality–
Worth23.32
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