TWIN - Twin Disc: Reiterating 'Hold' Rating As We Approach Fiscal Q3 Earnings (Technical Analysis)

2024-04-24 08:40:37 ET

Summary

• Twin Disc's stock momentum has eased off since December, but it is attempting to break through long-term resistance.
• The company reported strong sequential top-line growth and increased profitability in Q2, driven by its Marine & Propulsion and Land-Based Transmission businesses.
• Valuation remains a wild card, with the company's trailing free cash flow and EV/EBIT multiples looking attractive, but its sales and assets appear overvalued compared to their 5-year averages.

Intro

We wrote about Twin Disc, Incorporated ( TWIN ) in December of 2023 when we looked at the stock's continuous uptrending rally and whether this momentum could continue in earnest. Shares had rallied a very impressive 40%+ over the previous 6 months, leading to the reinstatement of the company's quarterly dividend. The reinstatement demonstrated management's growing confidence in the company's respective end markets & forward-looking financials....

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