APi
BofA upgraded APi Group Corp. (NYSE: APG) to Buy from Neutral with a $23 price target. The implied upside from the most recent closing price of $15.10 is 52%. Approximately 50% of APi’s revenue comes from fire inspection and other recurring revenue, and its backlog provides visibility on the remaining project-based revenue, said Obin. He also noted that he came away from a recent meeting with management more confident around the operational improvements at Chubb Fire & Security.
The stock traded around $16 early Tuesday, in a 52-week range of $14.13 to $26.84. Shares are down over 40% year to date.
Flowserve
The Underperform rating on Flowserve Corp. (NYSE: FLS) was raised to Neutral with a $31 price target. The implied upside from the most recent close at $28.93 is 7%. While execution has been challenged, Obin views end market strength (with 44% of revenue from oil and gas) and valuation as offsets.
The stock traded at around $28 on Tuesday, in a 52-week range of $26.84 to $43.63. Shares are down over 9% year to date. Flowserve has a dividend of 2.9%.
AMETEK
Obin downgraded AMETEK Inc. (NYSE: AME) to Neutral from Buy. The $122 price target implies upside of 9% from the most recent closing price of $112.35. Obin views the company as a high-quality compounder but also notes its relatively high mix of short-cycle industrial exposure, which gives it more cyclical leverage. Overall, Obin sees AMETEK facing downside risks from higher cyclicality amid potential destocking and the stock’s “bottom quartile valuation.”
The stock has a 52-week trading range of $106.17 to $148.07, and it traded near $109 a share on Tuesday. The stock is down 26% year to date. The dividend yield is 0.8%.
ITT
For ITT Inc. (NYSE: ITT), BofA’s downgraded was to Neutral from Buy, and it cut the $113 price target to $74, implying upside of 9% from the most recent closing price of $67.81. Obin cited the company’s above-average mix of European revenue with 37% of the total, stating that if the recent U.S. dollar appreciation continues, its revenue and earnings growth in the second half of this year will be affected. Global auto production rates will improve as supply chain pressures ease for auto original equipment manufacturers, but the timing of this recovery continues to be pushed out.
The stock traded around $66 early Tuesday, in a 52-week range of $63.77 to $105.54. Shares are down over 35% year to date. ITT has a dividend yield of 1.6%.
Originally posted at 24/7 Wall St.
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