Bank of America Securities analyst Ronald Epstein downgraded the rating on Teledyne Technologies (TDY – Research Report) to a Hold today, setting a price target of $400.00.
Ronald Epstein has given his Hold rating due to a combination of factors affecting Teledyne Technologies’ performance and outlook. The company’s recent earnings report deviated from market expectations of a “beat-and-raise” scenario, instead presenting a “miss-and-cut” result. This was primarily due to a slowdown in the Digital Imaging unit, which accounts for around half of Teledyne’s revenue and tends to have a short sales cycle. The company reduced its 2024 earnings per share (EPS) forecast significantly, which suggests a delayed recovery in this segment. Consequently, Epstein downgraded the stock from Buy to Neutral and reduced the price objective to $400, down from $490, reflecting the revised earnings expectations and the anticipated period of underperformance.
Furthermore, despite the downturn in the short term, Epstein sees potential in Teledyne for a strong return to growth in the future. He recognizes Teledyne’s successful cost reduction efforts leading to improved margins and its strong positioning in the Aerospace & Defense sector, which could benefit from recent legislative developments. However, the immediate outlook is overshadowed by the market’s reaction to management’s negative guidance and the subsequent drop in share price. Additionally, while the company’s shift in capital deployment towards share buybacks and a healthy liquidity position could be seen as positives, they also imply a potential pause in mergers and acquisitions, which may affect growth dynamics in the near term.
Based on the recent corporate insider activity of 50 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TDY in relation to earlier this year.
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Teledyne Technologies (TDY) Company Description:
Teledyne Technologies, Inc. engages in the provision of electronic and communication products for wireless and satellite systems. It operates through the following business segments: Instrumentation; Digital Imaging; Aerospace & Defense Electronics; and Engineered Systems. The Instrumentation segment includes monitoring and control instruments for marine, environmental, and industrial applications. The Digital Imaging segment offers sensors, cameras, and infrared systems. The Aerospace & Defense Electronics segment provides electronic components, data acquisition, subsystems, and communications equipment. The Engineered Systems segment develops and produces electrochemical energy systems and small turbine engines. The company was founded in 1960 and is headquartered in Thousand Oaks, CA.
