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On Friday, Citi analysts increased the price target for Chart Industries (NYSE:GTLS) shares from $195.00 to $200.00 while maintaining a Buy rating. The adjustment follows a significant 12% rise in the company’s stock the previous day, which was attributed to Chart Industries’ robust first-quarter performance, strong order intake, confirmation of its FY25 guidance, and minimal impact from tariffs. According to InvestingPro data, the company boasts a perfect Piotroski Score of 9, indicating exceptional financial strength, while current analysis suggests the stock is trading below its Fair Value.
Chart Industries’ recent financial results have demonstrated the company’s improved operational efficiency and its involvement in end-markets that have shown resilience, with revenue growing 24.1% in the last twelve months to $4.16 billion. Citi analysts have adjusted their FY25 EBITDA estimate slightly upward by 1% to $1.15 billion, accounting for stock compensation, due to anticipated higher revenues from the company’s Repair, Service, and Leasing (RSL) and Heat Transfer Solutions (HTS) segments. For deeper insights into Chart Industries’ financial health and growth prospects, including 10+ additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
The revised forecast also suggests an improved free cash flow (FCF) for FY25, estimated at $548 million. This improvement is expected to decrease the company’s net leverage from approximately 3.7 times at the end of FY24 to around 2.8 times at the end of FY25.
Citi’s analysis highlights Chart Industries’ solid backlog and the anticipated margin enhancements. The company’s limited exposure to traditional energy markets, which are less than 8% of its FY24 revenues, is seen as a positive factor in the risk-reward balance for investors. The analysts underscore the attractiveness of Chart Industries’ stock, noting that it is trading at less than 9 times its projected FY25 EBITDA and around 7 times its FY26 EBITDA. With these factors in mind, Citi has reaffirmed its Buy rating and raised the price target to $200.00.
In other recent news, Chart Industries has reported its Q1 2025 earnings, which showed a slight miss on both earnings per share (EPS) and revenue compared to analysts’ expectations. The company posted an EPS of $1.86, below the forecast of $1.92, and revenue of $1 billion, missing the expected $1.02 billion. Despite these misses, the company maintained a strong gross margin of 33.9% for the fourth consecutive quarter and reported a year-over-year EPS growth of 38.8%. Chart Industries has set a positive outlook for the year, projecting full-year 2025 sales between $4.65 billion and $4.85 billion, with an adjusted EBITDA forecast of $1.175 billion to $1.225 billion.
Stifel analysts have reiterated their Buy rating on Chart Industries with a price target of $214.00, citing the company’s robust order activity and resilience amidst market volatility. The firm highlighted Chart’s ability to meet its first-quarter 2025 targets, with strong ordering activity particularly in the Specialty and Aftermarket sectors. The company’s substantial backlog and expanding aftermarket business were noted as key factors supporting its growth. Additionally, Chart Industries faces a relatively modest tariff exposure, estimated at $50 million, which the company has strategies to mitigate.
Despite the macroeconomic risks, Chart Industries continues to see strong demand across various sectors, including space exploration, nuclear, and marine industries. The company’s strategic expansions in key markets, such as nuclear and helium, and its focus on high-growth sectors like data centers and LNG, have contributed to a positive investor sentiment. Chart Industries’ shares are noted to trade below those of its peers, despite having, in Stifel’s view, a stronger potential for growth.
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