Oshkosh Corporation (NYSE: NYSE:OSK), a manufacturer of specialty vehicles and vehicle bodies, had its price target adjusted by investment firm DA Davidson.
The firm, on Thursday, lowered its price target on the company's stock to $130 from the previous $140, while still holding to a Buy rating.
The adjustment comes after Oshkosh reported its second-quarter earnings for the year 2024. Despite a year-over-year decline in Access orders, DA Davidson remains positive about Oshkosh's outlook.
The company's order book is full into 2025, limiting its capacity to increase Access segment orders in the short term. Analysts find the flat outlook for the next year to be reasonable, considering the circumstances.
Oshkosh is expected to see growth in its Vocational and Defense segments, with clear trajectories extending through 2026 and potentially beyond. The firm's analysts believe that Oshkosh's current valuation is near trough levels, which they attribute to market concerns about a peak in earnings that has not materialized.
The investment firm further notes that it does not anticipate 2025 to be the peak year for earnings, suggesting a continued stable performance for Oshkosh.
Oshkosh reported a strong second quarter for 2024, with an 18% increase in revenue and a 36% rise in adjusted operating income. The company has also raised its full-year adjusted earnings per share forecast to $11.75, driven by robust performance across all segments.
A key development includes the delivery of next-generation delivery vehicles to the United States Postal Service, which is expected to drive growth in the coming years. Furthermore, Oshkosh has announced plans to acquire AUSA, a European specialty equipment manufacturer, to strengthen its Vocational segment.
The company's Access segment has seen a 6% revenue growth, while the Defense segment has begun deliveries and received orders for Family of Heavy Tactical Vehicles. The Vocational segment has achieved an 11% organic revenue growth.
Despite domestic Joint Light Tactical Vehicle revenue expected to decline, creating a $700 million drag in 2025, the company remains optimistic about revenue growth and margin expansion.
InvestingPro Insights
Following the recent price target adjustment by DA Davidson, Oshkosh Corporation (NYSE:OSK) continues to present a compelling investment case according to InvestingPro metrics. The company boasts a solid market capitalization of $6.89 billion and is trading at an attractive P/E ratio of 10.18, with an even more appealing adjusted P/E ratio of 9.16 based on the last twelve months as of Q2 2024. The PEG ratio, which measures the stock's price relative to its earnings growth, stands at a low 0.15, suggesting that the company's stock may be undervalued given its growth prospects.
InvestingPro Tips highlight that Oshkosh has raised its dividend for 11 consecutive years and is trading at a low earnings multiple, which could be of interest to dividend-seeking investors. Moreover, the company's liquid assets exceed its short-term obligations, indicating a healthy liquidity position. With analysts predicting profitability for the current year and a track record of profitability over the last twelve months, Oshkosh's financial stability is underscored.
For investors seeking more detailed analysis, there are additional InvestingPro Tips available on https://www.investing.com/pro/OSK, offering further insights into Oshkosh's performance and potential investment opportunities.
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