HUBB - Hubbell's Acquisitions And Restructuring Efforts Could Enhance FCF Growth

2024-05-01 08:52:46 ET

Summary

• Hubbell Incorporated reported better than expected quarterly net sales.
• The company's business model focuses on electrical and utility solutions for various industries, with a strong presence in Europe and the United States.
• Hubbell's expansion into the IoT market, recent acquisition of Northern Star Holdings, and sale of its residential lighting business could drive further growth and margin improvement.

Hubbell Incorporated ( HUBB ) recently released better than expected quarterly net sales, and net sales may receive significant acceleration from the IoT market. I also expect operating margin and FCF margin growth thanks to the recent acquisition of Northern Star Holdings. In addition, the cash received from the sale of the residential lighting business could be used for new product development or new acquisitions. There are obvious risks from failed M&A efforts, changes in the price of electricity, or goodwill impairment. However, I think that HUBB could trade more expensively.

Hubbell's Business Model, And Recent Quarterly Results

Hubbell Incorporated is a global provider of electrical and various utility solutions for a large number of end clients, including energy generation, telecommunications, and related industries....

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