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On Tuesday, Jefferies analyst Sheila Kahyaoglu adjusted the price target for Loar Holdings Inc (NYSE: LOAR) shares, reducing it to $95 from the previous $105, while continuing to recommend a Buy rating for the stock. Currently trading at $68.26, the company maintains a substantial P/E ratio of 274.88x. Kahyaoglu’s evaluation followed Loar Holdings’ announcement of a strong performance at the end of 2024, showing a 15% organic growth for both the quarter and the full year, with total revenue reaching $402.82M.InvestingPro analysis indicates the stock is currently trading above its Fair Value, with 12 additional exclusive insights available to subscribers.
The company’s robust results have led to a 2% increase in the forecast for 2025. In light of these developments, Kahyaoglu has increased the estimated earnings per share (EPS) for 2025 to $0.72, up from $0.67. This revision reflects an anticipated 12% organic growth for the current year, with the Defense sector expected to see a significant 20% increase due to backlog conversion. The company maintains impressive gross profit margins of 49.36% and operates with a moderate level of debt.
The decision to lower the price target to $95 is a reflection of the current market multiples, which are set at a premium similar to that of Loar Holdings’ peers. This adjustment takes into account the company’s potential for both organic growth and strategic acquisitions. Kahyaoglu’s commentary underscores the balance of solid performance and the potential for future expansion as key factors influencing the new price target. Despite the decrease in the price target, the analyst’s maintained Buy rating indicates a continued positive outlook on Loar Holdings’ stock.Get comprehensive insights into LOAR’s valuation metrics and growth potential with InvestingPro’s detailed research report, part of our coverage of over 1,400 US stocks.
In other recent news, Loar Holdings reported a strong financial performance for the fourth quarter of 2024, achieving a 15% year-over-year sales increase and record net income driven by robust activity in both the commercial and defense sectors. The company’s adjusted EBITDA for the full year reached $146 million, marking a $34 million increase from 2023, with a gross profit margin of 49.4%. Loar Holdings has also provided an optimistic outlook for 2025, projecting net sales between $480 million and $488 million and adjusted EBITDA ranging from $180 million to $184 million. RBC Capital Markets maintained an Outperform rating on Loar Holdings, reiterating a price target of $92, citing the company’s strong quarterly results and increased 2025 financial guidance. Meanwhile, Citi analysts adjusted their price target for Loar Holdings from $94 to $91 but maintained a Buy rating, noting the company’s effective expansion strategy and strong aftermarket demand. Despite potential near-term uncertainties in mergers and acquisitions, Loar Holdings continues to focus on its growth plan, supported by a robust defense sector outlook and strategic acquisitions. These developments highlight Loar Holdings’ continued resilience and strategic positioning amid macroeconomic challenges.
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