Goldman Sachs cuts ATMU stock rating to neutral, target at $39

On Tuesday, Goldman Sachs analyst Jerry Revich adjusted the rating for Atmus Filtration Technologies (NYSE:ATMU) from Buy to Neutral, setting a price target of $39.00. The change comes as ATMU shares are currently trading at the established price target. According to InvestingPro data, ATMU maintains strong fundamentals with $1.66 billion in revenue and healthy liquidity ratios. Revich highlighted the company’s potential to drive growth in its target markets and to use its capital effectively to enhance its industrial filtration business.

Despite the downgrade, the analyst’s outlook on Atmus Filtration Technologies remains positive, particularly regarding the company’s ability to outperform in its end markets. The firm’s stock has seen significant gains, outpacing the S&P 500 with a more than 90% increase compared to the S&P’s 33% rise since the company’s initial public offering (IPO).

Atmus Filtration Technologies has experienced a substantial valuation re-rating since its spin-off from Cummins (NYSE:CMI). The stock’s multiple expanded from 7.5 times forward EV/EBITDA at the IPO to 10 times currently. This re-rating, along with strong margin performance, has been a key driver of the stock’s impressive performance.

The valuation gap between Atmus Filtration Technologies and Donaldson, its closest peer, has also narrowed significantly. At the time of Atmus’s IPO, the gap was approximately 6 times and has since decreased to about 2 times. Since being added to Goldman Sachs’ Buy List on June 20, 2023, ATMU’s stock has surged by 93%, notably outperforming the S&P 500, which gained 35% in the same period.

In other recent news, Atmus Filtration Technologies Inc. reported its Q1 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $0.63, beating the projected $0.50. The company also exceeded revenue forecasts, reporting $417 million compared to the anticipated $412.3 million. This performance highlights Atmus’s strong market position and its ability to deliver consistent financial results. Additionally, Atmus announced a quarterly dividend of $0.05 per share, continuing its tradition of returning value to shareholders. The company’s Board of Directors emphasized the dividend as a reflection of Atmus’s financial stability. Furthermore, Atmus has been expanding its manufacturing capabilities and launching new products, which are expected to contribute positively to future revenue growth. Analyst feedback from firms like Goldman Sachs and JPMorgan indicated confidence in Atmus’s strategic direction and its ability to navigate market challenges. Overall, these developments underscore Atmus’s commitment to enhancing shareholder returns while maintaining a robust operational performance.

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