Another Raised Target Scotia Capital’s Mark Neville raised his ATS Corp. target to $66 from $60 with a “sector outperform” rating. The average is $59.14.
“We’ve raised our fiscal 2024 estimates to reflect the continued strength in order bookings, which is being largely driven by secular tailwinds (e.g., growing North American electric vehicle capacity), positive commentary from other industrial automation companies (i.e., Rockwell Automation; ROK-US; not covered) re: end-market demand, and what we expect to be an improving margin outlook as revenues ramp, supply chain pressures ease, and cost optimization benefits are realized,” he said. “Our revised F2024 adj. EBITDA forecast is approximately 7 per cent ahead of consensus. We have also increased our valuation multiple to 15 times (from 14 times), which, admittedly is well above historical but, in our opinion, deserved given the improvements in the business and strengthening secular and structural drivers (e.g., re-shoring, the need for more resilient supply chains, an aging population/workforce, inflationary pressures, etc.). It is also in line with (or below) where comparable companies trade.”