On Wednesday, DA Davidson showed confidence in ITT Corp. (NYSE:ITT) by increasing its price target to $165 from the previous $155, while retaining a Buy rating on the stock. The firm acknowledges ITT's consistent performance, highlighting its ability to gain market share and secure robust order bookings across all business segments, leading to a record backlog.
The analyst pointed out that ITT's sound execution has been instrumental in its market outperformance, which is reflected in share gains and strong price capture. This momentum has been a key driver behind the company's solid order bookings in all three of its business segments.
Despite facing a $0.10 headwind from interest and acquisition amortization following the kSARIA acquisition, ITT raised its guidance midpoint. This decision was supported by a combination of volume growth, favorable price-to-cost dynamics, and significant productivity improvements.
ITT's financial health was also a subject of positive remarks, with its balance sheet described as "quite strong." This strength is seen as providing ITT with the flexibility to pursue internal investments, mergers and acquisitions, and share repurchases.
The firm concluded its comments by adjusting its earnings estimates upward for 2024 and 2025 and introducing an initial estimate for 2026. The analyst reiterated a Buy rating on ITT Corp. shares, alongside the increased price target of $165.
In other recent news, ITT Inc. has surpassed analyst expectations with its third-quarter earnings, driven by a strong performance across all segments. The industrial manufacturing company posted adjusted earnings per share of $1.46, beating the analyst consensus of $1.43.
Revenue for the quarter was reported at $885.2 million, slightly above the estimated $883.22 million, signifying an 8% increase from the previous year. ITT attributes this success to a 17% order growth in Q3, driven by pump project awards, rail share gains, and increased demand for connectors.
In addition to these developments, ITT's operating margin expanded by 610 basis points to 23.5%, including a $48 million preliminary gain on the divestiture of Wolverine Advanced Materials. The company has also raised its full-year 2024 adjusted EPS guidance to $5.80-$5.86, up from its previous outlook, and compared to the analyst consensus of $5.83.
Furthermore, ITT now expects revenue growth of 10% to 12% for the year, with organic growth of 5% to 7%.
Lastly, a quarterly dividend of $0.319 per share has been announced, payable to shareholders of record as of late November.
InvestingPro Insights
Building on DA Davidson's positive outlook for ITT Corp. (NYSE:ITT), recent data from InvestingPro provides additional context to the company's financial performance and market position. ITT's market capitalization stands at $11.93 billion, reflecting its substantial presence in the industry. The company's revenue growth of 9.74% over the last twelve months aligns with the analyst's observations about ITT's market share gains and strong order bookings.
InvestingPro Tips highlight ITT's financial strength and shareholder-friendly policies. The company has maintained dividend payments for 54 consecutive years and has raised its dividend for 12 consecutive years, demonstrating a long-term commitment to returning value to shareholders. This aligns with DA Davidson's comments on ITT's strong balance sheet and financial flexibility.
Moreover, ITT's operating income margin of 16.46% and EBITDA growth of 10.81% in the last twelve months underscore the company's operational efficiency and profitability, supporting the analyst's positive remarks on ITT's execution and productivity improvements.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips that could provide deeper insights into ITT's investment potential.
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