On Tuesday, Jefferies raised its rating for Munters Group (MTRS:SS) stock from Hold to Buy, maintaining a price target of SEK 260.00. The firm cited a 23% upside potential from the current share price, considering the recent drop in share value as a favorable buying opportunity. The stock had seen a decline of about 10% over the past three months, influenced by negative sentiment from its U.S. peer Vertiv.
The firm believes that the pullback in Munters Group's shares is an overreaction and presents an attractive entry point for investors. Munters, specializing in climate-control technologies, is seen as well positioned to leverage growth opportunities in sectors such as batteries and data centers. The company's large installed base is expected to generate additional service opportunities over time.
Jefferies predicts that Munters will experience significant growth in the second half of 2024. The firm forecasts sales growth of 18% year-over-year and an adjusted EBITA margin of 14.0% for the latter half of 2024, up from 13.5% in the same period of the previous year. This growth is anticipated to be driven by strong performance in the Data Center Technology (DCT) and FoodTech segments, along with a modest recovery in AirTech.
Looking further ahead, Jefferies projects a compound annual growth rate (CAGR) for sales and adjusted EBITA of 13% and 16%, respectively, over a three-year period from 2023 to 2026. The firm's positive outlook is also based on Munters' strategic focus on expanding its Software as a Service (SaaS) offerings in the FoodTech space, which is expected to contribute to improved efficiency and profitability in the near to mid-term.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.