CMCO - Wells Fargo assigns Street-high price target to Columbus McKinnon

"We are initiating coverage of Columbus McKinnon (CMCO) with an Overweight rating and Street-high $70 price target, equating to 12.5x FY '23E EV/EBIDTA and 40%-plus upside potential," wrote analysts at Wells Fargo."Following years of streamlining the business, while expanding its TAM from $48 to $10B with its most recent acquisition, Dorner, management has generated above average margin improvement every year since FY'11 (EBIDTA +130 bps per year vs. +4 bps group average).""Despite the improvement, shares are trading at a substantial discount to peers and the pro forma earnings profile. Combined with the cyclical upside from cash compounding to legacy industrial businesses, where CMCO has 50%+ NA market share and secular growth plays in automation & IoT, CMNC is poised to deleverage faster than in prior cycles. The culmination of these factors sets up CMCO to become the next 'compounder' within Industrial Technology. Our FY'21/'22/'23 estimates are $1.20/$2.40/$3.20."SA author Stephen Simpson

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Wells Fargo assigns Street-high price target to Columbus McKinnon