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Investing.com - Raymond (NSE:RYMD) James initiated coverage of Hawkins (NASDAQ:HWKN) with a Market Perform rating on Wednesday, as the stock trades near its 52-week high of $165.87.
The research firm expressed caution about the chemical company’s stock, which has surged nearly 700% since 2019 and delivered a 50% return over the past year. According to InvestingPro analysis, the stock appears overvalued at current levels, despite being an 80-year-old business that appears "structurally limited to low/mid-teens long-term earnings growth."
Raymond James pointed to valuation concerns, noting that Hawkins currently trades at 18 times EBITDA compared to its historical average of 10 times, and at 50 times fiscal year 2026 free cash flow.
The firm described its stance as "generally leaning constructive" on the business quality, but indicated it would prefer to wait for "an actionable thesis to develop with more attractive risk/reward" before recommending shares.
Hawkins, founded in the 1940s, manufactures and distributes specialty chemicals and ingredients for industrial and water treatment applications across the United States.
In other recent news, Hawkins, Inc. reported impressive fourth-quarter financial results. The company achieved adjusted earnings per share of $0.78, exceeding analyst projections of $0.73. Revenue also outperformed expectations, reaching $245.3 million compared to the anticipated $227.99 million. Additionally, Hawkins has completed the acquisition of PhillTech, LLC, an Alabama-based manufacturer and distributor of water treatment products. This acquisition supports Hawkins’ strategy to expand its presence in the water treatment sector. The two companies have maintained a strategic partnership for several years prior to this development. These recent developments underscore Hawkins’ commitment to growth and expansion in its industry.
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