On Monday, TD Cowen exhibited confidence in Chart Industries (NYSE:GTLS), raising the firm's price target on the stock to $265 from $260, while reaffirming a Buy rating. The adjustment follows the company's performance update, which included a modest earnings before interest, taxes, depreciation, and amortization (EBITDA) shortfall and higher-than-anticipated cash utilization.
Despite these figures, Chart Industries' shares saw a 7% increase, buoyed by a robust order book and optimistic projections for the second quarter. The company also anticipates generating strong free cash flow (FCF) in the future, which contributed to the analyst's positive outlook.
TD Cowen's analysis indicates that even with a conservative estimate, placing expectations at the lower end of the company's guidance, EBITDA growth for Chart Industries appears robust. The analyst's commentary suggests that if the company can deliver on its free cash flow projections, its valuation is particularly compelling.
Chart Industries' recent performance has been marked by solid orders, and the analyst's commentary underscores the expectation of a bullish second quarter. The firm's anticipation of strong free cash flow moving forward is a key factor in the positive assessment of the stock's future potential.
The revised stock price target of $265 reflects the firm's belief in Chart Industries' ability to maintain its growth trajectory and deliver on financial projections. This optimistic stance is based on the company's latest financial results and forward-looking statements.
InvestingPro Insights
Recent data from InvestingPro provides a deeper look into Chart Industries' financial health and market performance. The company's market capitalization stands at $5.67 billion, highlighting its significant presence in the industry.
Despite concerns over a significant debt burden, as noted in one of the InvestingPro Tips, Chart Industries' net income is expected to grow this year, and analysts anticipate sales growth in the current year. These factors contribute to the positive sentiment surrounding the company's stock.
Chart Industries has demonstrated a strong return over the last three months with a price total return of 31.01%, and it's trading at a P/E ratio of 51.67. While this may be considered high, the company's PEG ratio of 0.26 for the last twelve months as of Q1 2024 suggests that the stock may be undervalued relative to its earnings growth. The company's revenue growth of 110.73% over the last twelve months further supports the analyst's optimistic outlook.
Investors interested in gaining further insights can find additional InvestingPro Tips for Chart Industries, which could provide a more comprehensive understanding of the stock's potential. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover why analysts predict the company will be profitable this year, among other valuable insights.
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