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On Wednesday, Modine Manufacturing (NYSE:MOD), a $4.38 billion market cap company, received a reaffirmed Buy rating and a $155.00 price target from DA Davidson. According to InvestingPro data, the stock is currently trading below its Fair Value, despite showing strong financial health metrics. The firm’s analysts highlighted Modine’s recent definitive agreement to acquire AbsolutAire, a company specializing in direct-fired heating, ventilation, and make-up air systems, with annual sales of $25 million. The acquisition is seen as a strategic addition to Modine’s product offerings and market presence.
Modine’s move to integrate AbsolutAire into its operations is consistent with its ongoing mergers and acquisitions strategy, which focuses on incremental growth opportunities. With annual revenue of $2.54 billion and an EBITDA of $358.4 million, Modine has demonstrated solid operational performance. DA Davidson’s analysts believe that this acquisition aligns well with Modine’s approach and could enhance its position in several key markets. The transaction is viewed as a logical step for Modine, complementing its existing business and potentially contributing to its future performance.
The acquisition of AbsolutAire is expected to bolster Modine’s product lineup, providing new avenues for growth within its targeted industries. The analysts at DA Davidson suggest that the deal is in step with Modine’s strategy of pursuing smaller, tactical acquisitions that can provide immediate benefits to the company’s portfolio and market reach.
Modine, known for its thermal management technology and solutions, aims to strengthen its market share through this acquisition. The company’s strategy has been to selectively add companies that can contribute to its growth and offer complementary products and services.
In summary, DA Davidson’s analysts have maintained their positive outlook on Modine Manufacturing, keeping the Buy rating and $155.00 price target unchanged. The acquisition of AbsolutAire is seen as a strategic fit for Modine, expected to be beneficial to the company’s product range and market position. InvestingPro analysis reveals 13 additional investment tips for MOD, along with comprehensive financial metrics and a detailed Pro Research Report, providing deeper insights into the company’s potential. Discover more about Modine’s valuation and growth prospects with an InvestingPro subscription.
In other recent news, Modine Manufacturing Company announced its plan to acquire AbsolutAire, a Michigan-based manufacturer, to strengthen its HVAC offerings. AbsolutAire reported approximately $25 million in revenue for 2024, and the acquisition is expected to close in April 2025, subject to customary conditions. In addition, Oppenheimer maintained an Outperform rating for Modine with a $145 price target, citing the company’s robust outlook in data center growth and a strong mergers and acquisitions pipeline. DA Davidson also reaffirmed a Buy rating with a $155 price target after Modine secured a significant $180 million order for data center cooling products from an AI infrastructure developer. The order is anticipated to have a substantial impact on Modine’s business, supporting its long-term growth projections. Furthermore, Modine announced a leadership change in its Performance Technologies segment, with Adrian I. Peace stepping down and CEO Neil D. Brinker assuming interim oversight. The company remains committed to its strategic goals, including achieving 15% to 18% adjusted EBITDA margins in the coming years. These developments reflect Modine’s ongoing strategic initiatives and growth potential across various markets.
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