UPDATE: BMO Capital Markets Reiterates Outperform Rating, Lowers PT on Thermon Group Holdings on Negative Product Mix

In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Thermon Group Holdings (NYSE: THR), but lowered its price target from $30.00 to $26.00.BMO Capital Markets noted, “Thermon reported headline fiscal 3Q13 (December) EPS of $0.24. The earnings miss was driven by lower-than-expected gross margin (200 bp lower). Gross margin was lower than expected owing to a higher mix of Greenfield projects (42% of total revenue in F3Q13 vs. 38% in F2Q13 and 35% of total revenue in F3Q12) and specific project circumstances. Management lowered revenue growth guidance to 5%-7% (7%-9% on a constant currency basis) from modest double-digit growth. In addition, F4Q13 gross margin guidance is similar to F3Q13 (i.e., 45.5%), which is below our previous assumption of 47.5%. Despite some near-term softness and a mild heating season, we believe that the medium- to long-term growth fundamentals remain intact and that F2014 will likely be a growth year with a more normalized product mix.”Thermon Group Holdings closed on Thursday at $22.04.