Wells Fargo analyst Joe O’Dea maintained a Buy rating on Atmus Filtration Technologies, Inc. (ATMU – Research Report) yesterday and set a price target of $28.00.
Joe O’Dea has given his Buy rating due to a combination of factors including Atmus Filtration Technologies, Inc.’s robust aftermarket exposure and its strategy to smooth out cyclical fluctuations in its revenue streams. In the fourth quarter of 2023, the company outperformed estimates in terms of both margins and revenue, and its projections for the initial phase of 2024 are even more promising than anticipated. This performance serves as a validation of the company’s resilience against cyclical pressures, largely because of its significant aftermarket segment, which comprises approximately 80% of its revenue.
Furthermore, O’Dea’s analysis underscores the company’s strategic supply chain transformation efforts, which are ongoing and primarily focused on locations in Europe and the Asia Pacific, with the final transition expected in South Africa. Atmus Filtration Technologies is also actively expanding its industrial filtration segment and has been building its M&A pipeline over the past six months, targeting acquisitions in the $50-$60M revenue range. These positive developments, along with the adjusted EPS estimate increase to $2.22 from $2.06 and the maintenance of a $28 price target, solidify O’Dea’s confidence in the company’s stock, warranting the Buy rating.
In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $29.00 price target.
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Atmus Filtration Technologies, Inc. (ATMU) Company Description:
Atmus Filtration Technologies Inc. designs, manufactures, and sells filtration products under the Fleetguard brand name in North America, Europe, South America, Asia, Australia, Africa, and internationally. It offers fuel filters, lube filters, air filters, crankcase ventilation, hydraulic filters, and coolants, as well as fuel additives. The company’s products are used in on-highway and off-highway commercial vehicles; and agriculture, construction, mining, and power generation vehicles and equipment. It serves original equipment manufacturers, dealers/distributors, and end-users. The company was founded in 1958 and is headquartered in Nashville, Tennessee. Atmus Filtration Technologies Inc. operates as a subsidiary of Cummins Inc.
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