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Investing.com - DA Davidson lowered its price target on Miller Industries (NYSE:MLR) stock to $64 from $66 on Thursday while maintaining a Buy rating on the towing equipment manufacturer. The stock, currently trading at $43.72, appears undervalued according to InvestingPro’s Fair Value model, with analyst targets ranging from $64 to $70.
The price target adjustment follows meetings between DA Davidson and Miller Industries management in Boston, where CEO Will Miller and CFO Debbie Whitmire represented the company. The research firm described its takeaways from the meetings as "largely positive," despite some caution expressed by the company regarding the tariff situation. The company maintains strong financial fundamentals with a healthy current ratio of 3.23 and moderate debt levels, though its gross profit margin stands at 14.16%.
Miller Industries noted that the regulatory environment is beginning to shift in its favor, potentially benefiting the company’s operations. Management also indicated that the proposed "Big Beautiful Bill," if passed, could drive favorable fleet capital expenditures for customers.
The company reported that military opportunities have returned to pre-Covid levels, representing another potential growth avenue. This development marks a significant recovery in a segment that had been disrupted during the pandemic.
Despite slightly adjusting its 2025 estimates and price target, DA Davidson expressed confidence that Miller Industries’ earnings are "poised to rebound," supporting its decision to maintain a Buy rating on the stock. The company has demonstrated resilience with 16 consecutive years of dividend payments, though its stock has experienced a significant 34.8% decline over the past six months.
In other recent news, Miller Industries reported stronger-than-expected earnings for the first quarter of 2025. The company achieved earnings per share (EPS) of $0.69, surpassing the forecast of $0.60, and recorded revenue of $225.7 million, exceeding the anticipated $218.7 million. Despite a 35.5% decline in net sales compared to the same period last year, the company attributed its success to strong demand for towing and recovery vehicles and strategic supply chain management. The firm has maintained its full-year revenue guidance of $950-$1,000 million and expects an EPS range of $2.90-$3.20. Analysts from D.A. Davidson have been closely monitoring the company’s tariff strategies and inventory levels, noting minimal direct exposure to China. Additionally, Miller Industries has implemented a tariff surcharge on new orders and a price increase on parts and accessories to mitigate potential tariff impacts. The company continues to focus on reducing debt, improving cash flow, and returning capital to shareholders.
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