Knowles (KN – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Tristan Gerra from Robert W. Baird maintained a Buy rating on the stock and has a $20.00 price target.
Tristan Gerra has given his Buy rating due to a combination of factors that indicate a positive trajectory for Knowles Corporation. The company is anticipated to experience a slight sequential revenue rebound across all segments in the second quarter, along with a gross margin expansion within its Precision Devices segment over the course of the year. This expansion is expected to include benefits from price optimization opportunities. Additionally, Knowles management projects to generate over $100 million in free cash flow (FCF) this year, which is intended to support ongoing stock buybacks and some debt retirement, further strengthening the company’s financial position.
Moreover, the strategic opportunities that Knowles is pursuing, such as the close to conclusion CMM acquisition, are set to enhance the company’s EBITDA target ahead of initial expectations. This is particularly significant as it points towards gross margins increasing from low 30% levels at the time of purchase to nearly 40% by year-end. While being conservative in their revenue forecast for the year due to the slow recovery in the industrial sector, Gerra’s unchanged EPS estimates reflect confidence in the company’s ability to expand gross margins within the Precision Devices segment and maintain strong cost controls and cash generation. These factors collectively contribute to the rationale behind Gerra’s Buy rating for Knowles’s stock.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Knowles (KN) Company Description:
Knowles Corp. supplies advanced micro-acoustic, audio processing and precision device solutions. It operates through the following segments: Audio and Precision Devices. The Audio segment includes analog and digital micro-electro-mechanical systems microphones, electret condenser microphones, smart microphones, ultrasonic sensors, acoustic processors and balanced armature speakers. The Precision Devices segment offers ceramic capacitors, electromagnetic interference filters, capacitors, single layer capacitors, precision variable capacitors, and thin film devices across diverse end markets, such as industrial, defense, aerospace, medical, and telecommunications markets. The company was founded by Hugh Knowles in 1946 and is headquartered in Itasca, IL.
