With this note, we transition coverage of Kimball Electronics (KE) to our company sponsored research platform, with a moderate risk rating and $27 price target, based on 15x our F2027 free cash flow (FCF) estimate of $1.80. We project a 10% year-over-year revenue decline in 1Q:26, mainly driven by the Auto segment, with improving margins and EPS expansion. We expect KE to continue to control the controllable while it absorbs the loss of a $100 million Auto contract and return to revenue growth in F2027 at higher margins. Management says it remains focused on repositioning the company following the loss of two large contracts (F2024 and F2025) and amid a challenging demand environment. KE has divested a non-core business unit; closed its Tampa facility and moved production to other facilities; and implemented other efficiencies to protect margins, which should help profitability once revenue growth normalizes. Over the next couple of years, KE plans to focus on gaining back the revenue it has lost and then returning to double-digit growth, with a focus on the higher margin medical vertical. In support of this effort, KE is adding a new manufacturing facility in Indianapolis focused on the medical industry. KE ended 4Q:F25 with $89 million in cash and expects to remain cash flow positive. We expect further debt repayments aided by the improved cash flow and the upcoming sale of the now closed Tampa facility. We apply 15x to our F2027 FCF per share projection of $1.80 to derive our $27 price target. This multiple is a turn lower than the two-year historical average. We assign a moderate risk rating, supported by its sustained profitability, improving balance sheet and track record of generating free cash flow. Over the past 12 months, KE shares are up 67% compared to the Russell 2000 Index increase of 7%.