We raise our price target to $257 (from $243) as we increase our five-year EPS CAGR by 200 basis points to 15% to reflect growing opportunities in the domestic semiconductor market, as well as commercial space and nuclear energy.
3Q:25 EPS of $1.99 topped our $1.92 forecast and the year-earlier EPS of $1.74 (up more than 14%) on 10% revenue growth (more than 4% ahead of our forecast).
Advanced Surface Technologies (AST) revenue expanded more than 17% year over year to almost $109 million in 3Q:25, nearly 8% ahead of our forecast, on growing precision cleaning demand, while capital equipment sales remain choppy.
Sealing sales were up almost 6% year over year in 3Q:25, almost 3% above our projection, on pricing and growing aerospace, commercial space, food and biopharma demand, more than offsetting continued commercial vehicle weakness.
We lift our 2025 EPS estimate to $7.87 (from $7.72) to reflect our increased AST growth assumption and better Sealing margins, offset by increasing investments in AST to support growth.
We increase our 2026 revenue growth forecast to 10% (previously 6%), underpinned by the recent acquisition of Overlook Industries and the planned purchase of AlpHa Measurement Solutions (expected by management to close later this month) offset by slower AST margin expansion due to continued growth investments.
We introduce our 2027 EPS projection of $10.28 (17% growth) on more than 8% revenue expansion, supported by growth investments in 2H:25 and 2026.
We model net leverage rising to 2.0x at year end 2026 with $280 million of 4Q:25 acquisitions funded by the revolver. We forecast debt reduction through 2026-2027 but expect M&A opportunities to remain the primary use of cash.
Our raised $257 price target (previously $243) is based on an unchanged 27x our average 2026-2027 EPS forecast of $9.53. We formerly based our valuation on 27x our 2026 EPS projection of $9.00.
22 Dec 2025
Raise Price Target To $257 (From $243) Even As We Trim Our 2026 EPS Estimate To Reflect Ongoing Growth Investments; Forecast Multiyear Double-Digit EPS Growth
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Raise Price Target To $257 (From $243) Even As We Trim Our 2026 EPS Estimate To Reflect Ongoing Growth Investments; Forecast Multiyear Double-Digit EPS Growth
We raise our price target to $257 (from $243) as we increase our five-year EPS CAGR by 200 basis points to 15% to reflect growing opportunities in the domestic semiconductor market, as well as commercial space and nuclear energy.
3Q:25 EPS of $1.99 topped our $1.92 forecast and the year-earlier EPS of $1.74 (up more than 14%) on 10% revenue growth (more than 4% ahead of our forecast).
Advanced Surface Technologies (AST) revenue expanded more than 17% year over year to almost $109 million in 3Q:25, nearly 8% ahead of our forecast, on growing precision cleaning demand, while capital equipment sales remain choppy.
Sealing sales were up almost 6% year over year in 3Q:25, almost 3% above our projection, on pricing and growing aerospace, commercial space, food and biopharma demand, more than offsetting continued commercial vehicle weakness.
We lift our 2025 EPS estimate to $7.87 (from $7.72) to reflect our increased AST growth assumption and better Sealing margins, offset by increasing investments in AST to support growth.
We increase our 2026 revenue growth forecast to 10% (previously 6%), underpinned by the recent acquisition of Overlook Industries and the planned purchase of AlpHa Measurement Solutions (expected by management to close later this month) offset by slower AST margin expansion due to continued growth investments.
We introduce our 2027 EPS projection of $10.28 (17% growth) on more than 8% revenue expansion, supported by growth investments in 2H:25 and 2026.
We model net leverage rising to 2.0x at year end 2026 with $280 million of 4Q:25 acquisitions funded by the revolver. We forecast debt reduction through 2026-2027 but expect M&A opportunities to remain the primary use of cash.
Our raised $257 price target (previously $243) is based on an unchanged 27x our average 2026-2027 EPS forecast of $9.53. We formerly based our valuation on 27x our 2026 EPS projection of $9.00.