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On Thursday, Citi analysts adjusted their outlook on IDEX Corp (NYSE:IEX), reducing the price target slightly from $267.00 to $264.00 while sustaining a Buy rating on the company’s stock. The revision follows IDEX’s near-term underperformance in the market, with shares declining by 9.6% compared to the S&P 500’s marginal gain of 0.4%.
Citi’s analysis acknowledges the current pressure on IDEX’s first-quarter outlook, which has not met previous sell-side expectations, and the company’s guidance for the second half of the year, which falls below the consensus for 2025 earnings per share. Despite these challenges, Citi notes positive signs such as growth in orders and an uptick in demand within the Health & Science Technologies (HST) segment, suggesting potential for improving organic growth throughout 2025.
The firm recognizes that IDEX currently exhibits more of a "show-me" aspect, meaning that it needs to demonstrate its value proposition more than other stocks typically do to justify a higher multiple. However, Citi remains positive about the company’s long-term value creation prospects. This optimism is based on IDEX’s historical track record, its leading positions in its end markets, and the potential for ongoing strategic capital deployment.
Citi’s maintained Buy rating reflects a belief in the company’s ability to overcome current headwinds and capitalize on its strengths to deliver significant value over time. Despite the minor adjustment in the price target, Citi’s outlook for IDEX Corp remains favorable, with expectations of a turnaround in performance as the year progresses.
In other recent news, IDEX Corporation reported a mixed performance for the fourth quarter of 2024, with record sales of $863 million, up 9% from the same quarter in 2023. Despite this, the company’s revenue fell short of expectations and it provided a weaker earnings guidance for the first quarter of 2025, indicating a potential decrease in organic sales between 3% to 4%. The company also announced a diluted earnings per share (EPS) of $1.62 for the fourth quarter, up 13% from the previous year, and an adjusted diluted EPS of $2.04, up 11%. However, IDEX’s full-year report showed flat sales of $3.3 billion and a decrease in reported diluted EPS of 15%.
Analyst Matt Summerville of DA Davidson noted that the company’s 2025 outlook falls below expectations, particularly in terms of organic growth and adjusted EPS. Despite these challenges, IDEX CEO Eric D. Ashleman expressed confidence in the company’s ability to navigate an uncertain environment and emphasized its commitment to growth. The company’s recent acquisitions, such as Mott Corporation, and strong price capture across all segments were among the positive developments.
These recent developments suggest a cautious approach to the new fiscal year, with the company prepared for potential headwinds in its target markets. The Health & Science Technologies segment delivered flat organic sales, while the Fire & Safety/Diversified Products segment saw an 8% increase in net sales. The Fluid & Metering Technologies segment remained relatively stable compared to the prior year.
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