Ducommun stock price target raised to $95 from $72 at RBC Capital

Investing.com - RBC Capital has raised its price target on Ducommun Incorporated (NYSE:DCO) to $95.00 from $72.00 while maintaining an Outperform rating on the aerospace and defense manufacturer. According to InvestingPro data, the stock is currently trading near its 52-week high of $86.64, with a P/E ratio of 28.35x and strong momentum scores.

The firm cited Ducommun’s engineered products portfolio as a key driver for the increased valuation, noting that while this segment represents less than 25% of total company revenue, it contributes over 60% of EBITDA. RBC Capital believes this high-margin business can drive both earnings growth and multiple expansion. The company maintains a healthy gross profit margin of 25.72% and operates with moderate debt levels.

Ducommun shares have gained approximately 30% year-to-date, which RBC attributes to growing commercial original equipment sentiment and stronger outlook for Boeing (NYSE:BA)’s production ramp. The company’s exposure to missiles, radar, the B-21 program, shipbuilding, and space align well with current Department of Defense priorities. InvestingPro analysis shows the stock has delivered impressive returns, with a 41.89% gain over the past year and strong financial health metrics.

RBC Capital continues to favor Ducommun for value exposure within the small-cap defense technology sector, which it believes is positioned for continued outperformance. This outlook is driven by anticipated growth in FY26 defense spending and positioning in growth markets including space, missiles, missile defense, hypersonics, unmanned systems, and AI.

The firm suggests that potential increased disclosure around the Engineered Products portfolio could positively impact investor sentiment, with any future acquisitions in this area likely to benefit the company.

In other recent news, Ducommun Incorporated reported its first-quarter 2025 earnings, exceeding market expectations with an earnings per share (EPS) of $0.83, compared to the forecasted $0.69. The company’s revenue also surpassed predictions, reaching $194.1 million, reflecting a 1.7% increase year-over-year. Ducommun achieved a record gross margin of 26.6%, marking a 200 basis point improvement from the previous year. The defense segment showed significant growth, contributing to a defense backlog increase to $620 million, which provides stability for future revenue. The company is also undergoing facility consolidations, which are expected to yield $11-13 million in annual savings. Ducommun reaffirmed its mid-single-digit revenue growth target for 2025, anticipating strong performance in the latter half of the year. Additionally, the company is exploring potential mergers and acquisitions to enhance its product mix. The positive earnings report reflects Ducommun’s strategic initiatives and operational efficiencies, despite challenges in the commercial aerospace sector.

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