On Tuesday, Seaport Global Securities made a bullish case for shares of Nordson (NASDAQ:NDSN) Corporation (NASDAQ:NDSN), upgrading the stock from Neutral to Buy and setting a price target of $250. Currently trading at $224.04, the stock has recently hit oversold territory according to InvestingPro technical indicators.
The firm's analyst cited the company's valuation and the anticipated success of its NBS Next (LON:NXT) strategy as key factors expected to drive Nordson back to above-average profitable growth.
The upgrade comes after a period of declining organic sales and cash EPS growth rate for Nordson over the last two years, attributed to sector headwinds in Advanced Tech, Medical (TASE:PMCN), and most recently, Industrial.
Despite these challenges, the company maintains impressive gross profit margins of 55.25% and operates with moderate debt levels, according to InvestingPro data. The analyst predicts that the most recent headwinds should improve with an industrial recovery anticipated to take hold in early 2025, buoyed by lower interest rates and more clarity around tariffs.
Despite a positive outlook, Seaport Global Securities has adjusted its 2025 EPS estimates for Nordson downward from $10.15 to $10.01, due to current uncertainties in early 2025 order visibility, particularly in the Industrial Precision Solutions segment. Additionally, the firm has introduced a 2026 EPS estimate of $11.07.
The analyst's valuation work suggests that Nordson shares present a good entry point for investors. The $250 price target is based on a 2026 EV/EBITDA multiple of 19.3x, compared to the current EV/EBITDA of 18.39x. Notably, the company has maintained dividend payments for 45 consecutive years, with 31 years of consecutive increases.
According to Seaport's analysis, Nordson shares are valued between $228 and $239, reinforcing the opportunity seen in the current stock price. For a deeper analysis of Nordson's valuation and growth prospects, investors can access comprehensive research reports and additional financial metrics through InvestingPro.
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