UPDATE: Barrington Upgrades Nordon, Sees Growth In Emerging Markets
Nordson (NASDAQ: NDSN) was upgraded to Outperform by Barrington Research Wednesday, setting a price target of $95 a share.
At mid-day, Nordson were up less than one percent at $82.11 per share.
Hokanson increased his 2014 earnings estimate to $3.80 per share, from $3.76, and a penny ahead of consensus.
The firm's Rudolf Hokanson said the upgraded follows recent meetings and travel with company management. He highlighted several points:
- Approximately 40 percent of revenue is made up of consumables.
- Management affirmed current guidance of a 24 percent operating margins in Q3 (July).
- Backlog is usually about 50 percent of an upcoming quarter's expected revenue.
- Polymer business usually has a three‐ to four‐month lead time, which is relatively long compared too much of Nordson's businesses.
Growth drivers include emerging geographical markets where an increasingly larger middle class has an appetite for products like disposable diapers and smart phones, according to Hokanson.
The company is expanding its production capacity with new facilities in Colorado and China.
Nordson has boosted its dividend annually for the past 50 years and currently aims for a dividend pay-out ratio of 20 percent of profits, Hokanson said.
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