On Friday, DA Davidson increased its price target on shares of Modine Manufacturing (NYSE:MOD) to $110 from $90 while maintaining a Buy rating on the stock.
The firm's decision follows recent meetings with Modine's management, which bolstered the analyst's confidence in the company's growth prospects.
The analyst highlighted several factors contributing to the positive outlook for Modine. These include the expected benefits from acquisition synergies with Stone Safety Manufacturing (SSM), including the addition of a new hyperscale customer.
Additionally, gains in the company's core Data Center (DC) business, along with the potential from liquid optionality and the implementation of 80/20-driven portfolio optimization, were noted as key drivers.
Further contributing to the upgraded price target is Modine's focus on lean implementation to improve productivity. The establishment of new financial targets and an underleveraged balance sheet were also mentioned as reasons for the optimistic stance on the stock's future performance.
The analyst's raised forecast for fiscal years 2025 and 2026 suggests there may be room for additional upside. This revision comes on the heels of the SSM acquisition, which appears to be a strategic move for Modine Manufacturing, helping to justify the increased price target.
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