2023-06-09 15:45:38 ET
Mayville Engineering ( NYSE: MEC ) on Friday was downgraded to Neutral from a prior investment rating of Outperform by analysts at Baird. They said the metal fabricator is seeing a slowdown in its growth rate amid softer demand from customers who make commercial vehicles, construction equipment and farming machinery.
“We are moving to the sidelines with Mayville ( MEC ) up substantially since our upgrade last November as the shares now reached our $14 price target,” Mircea “Mig” Dobre, analyst at Baird, said in a June 9 report. “Key end-market volume growth (on- and off-highway) is set to peak in 2023 and moderate in 2024.”
A positive resolution to Mayville’s ( MEC ) lawsuit against Peloton Interactive ( PTON ) also might help to improve investor sentiment toward the company, according to Baird. Mayville ( MEC ) last year sued Peloton, claiming the at-home exercise company breached a contract when it canceled an order for stationary bike parts.
Demand for Peloton ( PTON ) equipment plunged as the pandemic faded and people went back to the gym. Mayville ( MEC ) had spent $35 million to $40 million to add factory capacity and another $3.7 million to $4.3 million for launch costs, according to figures cited by Baird.
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Mayville Engineering downgraded to Neutral at Baird