An Impressive Quarter From Nordson Doesn't Move Baird Off The Sidelines

Baird reiterated its neutral rating on Nordson Corporation NDSN, despite impressive F3Q16 results, driven by robust Advanced Tech volumes which supported strong margin expansion.

Q3 adjusted EPS was $1.47, above consensus estimate of $1.33 and $1.25-1.37 guidance. The company's F4Q16 expectations were also ahead of consensus. Q4 adjusted EPS guidance was $1.15-1.27 (vs $1.16 consensus), which assumes Q4 revenue up 6-10 percent year-over-year (up 5-9 percent organic, up 1 percent acquisitions, flat FX) and appears reasonable as per the analysts.

"We are incrementally positive on NDSN given the magnitude of F3Q upside, but we remain on the sidelines in search of better entry points and/or greater confidence in the sustainability of recent top-line/bottom-line trends." wrote Baird, reiterating its Neutral rating and lifting the price target to $106 from $91.