2024-03-21 20:51:20 ET
Summary
- Gates Industrial stock was downgraded to a 'Hold' rating due to uncertainty and bearish forward-looking EPS revisions last November.
- The company's Q4 earnings report showed a significant improvement in gross margin, adjusted EBITDA, and free cash flow trends.
- The positive momentum is expected to continue into fiscal 2024, with promising signs from enterprise initiatives and strong earnings growth potential.
Intro
After originally turning bullish on Gates Industrial Corporation plc ( GTES ) in May of 2023, we reverted to a ' Hold ' rating in early November just before the announcement of the company's third-quarter earnings. We turned bullish approximately 10 months ago due to underlying strength in both the 'Power Transmission' segment as well as improving fundamentals in the 'Fluid Power' area. Furthermore, margin gains and an improving balance sheet were also noteworthy trends in our eyes given the adverse ramifications of the cybersecurity incident in February of 2023....
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Gates Industrial: Improving Profitability Outlook Finally Driving The Stock Forward