ATS Corp T.ATS

Alternate Symbol(s): ATS

Industrials

ATS Corporation is a Canada-based automation solutions provider. The Company uses its knowledge base and global capabilities in custom automation, repeat automation, automation products and value-added services, including pre-automation and after-sales services, to address the sophisticated manufacturing automation systems and service needs of multinational customers in markets, such as life sciences, food and beverage, transportation, consumer products, and energy. It engages with customers on both greenfield programs, such as equipping new factories, and brownfield programs, including capacity expansions, production relocations, equipment upgrades, software upgrades, efficiency improvements and factory optimizations. It offers post-automation services. It also offers artificial intelligence (AI) and machine learning (ML)-based tools for industrial production. The Company also designs and manufactures automated water purification solutions for biomedical and life science applications.

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Post by retiredcfon Apr 27, 2023 8:34am

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Post# 35416535

TD

Currently have a $63.00 target. GLTA

ATS Corporation

(ATS-T) C$56.43

Read-Throughs from ROK Earnings Beat and Guidance Raise

Event

Rockwell Automation reported Q2/F23 earnings and updated its guidance.

Impact: POSITIVE read-throughs for ATS

Rockwell and ATS have different business models and different end-market exposures; therefore, we always find it somewhat difficult to extrapolate from Rockwell's results to those of ATS. That said, we believe that Rockwell's Q2/F23 earnings and guidance raise have POSITIVE read-throughs for ATS.
Q2/F23 Results: Rockwell reported Q2/F23 adjusted EPS of US$3.01, well above the consensus estimate of US$2.59. Total sales of US$2,275mm, which are of more interest to us, were up 26% y/y, and came in 9% above the consensus forecast of US$2,093mm.
Guidance: Rockwell raised its F2023 outlook, and is now calling for total sales growth of 12.5%-16.5% vs. 10%-14% previously, including organic sales growth of 13%-17% vs. 11%-15% previously. Adjusted EPS is now expected to be in the range of US$11.50-US$12.20 vs. US$10.70-US$11.50 previously, and the mid-point of the revised guidance range (US$11.85) is 5% above the consensus estimate of US$11.27. Rockwell attributed the guidance increase to its H1/ F23 performance and record backlog, and noted that it assumes continued improvement in electronic component availability.
Organic Growth Outlook by Market: Rockwell continues to expect high-teens organic growth in automotive, and low-teens organic growth in both life sciences and food and beverage. Automotive, life sciences, and food and beverage comprised 41%, 37%, and 10% of ATS' Q3/F23 backlog, respectively.