Skip to main content

Market Overview

KeyBanc Bullish On Altra Industrial Motion After Fortive Acquisition

Share:
KeyBanc Bullish On Altra Industrial Motion After Fortive Acquisition

The bullish case for Altra Industrial Motion Corp (NASDAQ: AIMC) can be made now that the acquisition of Fortive Corp (NYSE: FTV) automation and specialty business for $3 billion is underway, according to KeyBanc Capital Markets. 

The Analyst

KeyBanc's Jeffrey Hammond upgraded Altra Industrial Motion from Sector Weight to Overweight with a new $49 price target.

The Thesis

Altra and Fortive confirmed this week that an exchange offer has commenced, and Altra's stock moved lower due to exchange offer arbitrage dynamics, Hammond said in the upgrade note. (See the analyst's track record here.)

Yet the weakness also created an attractive entry point for investors, with the stock trading at around 9.5 times 2019E EBITDA, the analyst said. 

The bullish case for Altra's stock is also based on expectations for the addition of Fortive's A&S business to notably improve the company's growth and return outlook, Hammond said. The transaction will also give Altra critical operational expertise, and these encouraging dynamics aren't factored into the stock, which is trading at a 20-percent discount to peers on EV/EBITDA, he said. 

Altra's valuation should close the gap with peers as management succeeds in integrating the business, and the incremental cash generation from the deal supports faster-than-expected leverage reduction, according to KeyBanc. 

Price Action

Altra shares were rising 1.32 percent to $38.50 at the time of publication Thursday.

Related Links:

Baird Gets Bullish On Altra Industrial Motion Following Fortive Deal

JPMorgan Impressed With Fortive — 'In A Financially Neutral Way'

Public domain photo via Wikimedia. 

Latest Ratings for AIMC

DateFirmActionFromTo
Jan 2021KeyBancDowngradesOverweightSector Weight
Nov 2020KeyBancMaintainsOverweight
Oct 2020RosenblattMaintainsNeutral

View More Analyst Ratings for AIMC
View the Latest Analyst Ratings

 

Related Articles (AIMC + FTV)

View Comments and Join the Discussion!

Posted-In: Industrial Automation And Specialty Jeffrey Hammond KeyBanc Capital MarketsAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
SAMEvercore ISI GroupMaintains1,500.0
SEAutonomous ResearchInitiates Coverage On378.0
ALHCMorgan StanleyInitiates Coverage On36.0
ALHCRaymond JamesInitiates Coverage On30.0
HAEMorgan StanleyDowngrades83.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com