Applied Industrial Technologies Gets Price Target Hike Following Q4 Results

  • KeyBanc analyst Ken Newman raised the price target for Applied Industrial Technologies Inc AIT to $140 from $120 while maintaining the Overweight ratings on the shares.
  • Newman mentions that the management is taking a rational approach to FY23 guidance given tougher comparisons and macro uncertainty.
  • However, he views the guidance as likely too conservative given stronger demand momentum QTD and opportunities for potential upside from capital deployment via M&A or share repurchases.
  • Baird analyst David Manthey downgraded Applied Industrial Technologies to Neutral from Outperform and raised the price target to $129, from $115.
  • The analyst states that the company reported "excellent" June-quarter results, and initial FY23 guidance also implied an upside to his estimates.
  • However, Manthey is taking a more cautious view, and following the roughly 30% year-to-date outperformance, he recommends investors take some profits.
  • AIT yesterday reported fourth-quarter net sales growth of 18.5% year-over-year to $1.1 billion, above the consensus of $977.43 million. EPS was $2.02, beating the consensus of $1.66.
  • The company also announced a new 1.5 million share repurchase program.
  • The company provided guidance for FY23; it sees EPS of $6.65 to $7.30 (vs. consensus of $6.61) based on sales growth of 3% to 7% and EBITDA margins of 10.8% to 11.1%.
  • Price Action: AIT shares closed lower by 4.63% at $113.39 on Friday.
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