Analysts See Up To 31% Upside In Recently Listed Cadre Holdings

Analysts See Up To 31% Upside In Recently Listed Cadre Holdings

Several analysts initiated coverage on the recently listed Cadre Holdings Inc CDRE, a manufacturer and distributor of safety and survivability products for first responders. Cadre's first dividend payment of $0.08 per share will be made on December 7, 2021, to shareholders of record on November 22, 2021.

  • Raymond James analyst Brian Gesuale initiated Cadre Holdings with an Outperform rating and a price target of $25, implying an upside of 26%.
  • The analyst calls the company the "undisputed market leader" in safety and survivability equipment for first responders, military and commercial customers.
  • Given "highly visible" low-single-digit to mid-single-digit sales growth and several hundred basis points of margin expansion potential, Gesuale views Cadre's model as attractive.
  • Stephens analyst Daniel Imbro initiated with an Overweight rating and a price target of $23, implying an upside of 16%
  • Imbro notes the company's strong market share in key recurring revenue categories gives it an attractive financial profile.
  • He also thinks that while Cadre is not immune to supply chain challenges, its ability to successfully grow its adjusted EBITDA margins over the last few quarters shows that it is navigating the current backdrop well.
  • Imbro adds that the company's low capital intensity creates strong free cash flow, and management has ample balance sheet flexibility to pursue M&A and continue to grow its dividend.
  • Stifel analyst Bert Subin initiated with a Hold rating and a price target of $20, implying an upside of 1%.
  • Subin mentions that as a producer and distributor of safety products sold primarily to law enforcement and other first responders, Cadre currently holds significant market share across its verticals and has signaled a strategy to be a consolidator within the safety market.
  • Suppose their inorganic growth strategy is successful, meaning the company acquires bolt-on companies at attractive multiples and shows an ability to demonstrate an expanding footprint outside the U.S. In that case, he sees potential valuation upside, Subin added, calling M&A "the long-term wildcard" for the company.
  • B. Riley analyst Jeff Van Sinderen initiated with a Buy rating and a price target of $26, implying an upside of 31%. The analyst expects accelerating growth through acquisitions and views the company as an entrenched market share leader with a best-of-breed, life-saving safety, and survivability product.
  • Sinderen adds that Cadre's CEO with a strong track record of creating substantial shareholder value.
  • Lake Street analyst Mark Smith initiated with a Buy rating and a price target of $24.
  • Smith thinks Cadre is well-positioned to benefit from rising police budgets, its competitive position, and current tailwinds as "the only one-stop shop" for law enforcement body armor, duty belt gear, and holsters and as the primary provider for Explosive Ordinance Disposal, or EOD, equipment to worldwide militaries.
  • He also sees the recent IPO giving Cadre dry powder to make accretive acquisitions and expand "its already dominant market share."
  • Price Action: CDRE shares are trading higher by 1.54% at $19.80 on the last check Monday.

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