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On Wednesday, Roth/MKM initiated coverage on Standex International (NYSE:SXI), assigning a Buy rating to the company's shares with a price target of $175.00. Trading at $133.95, the stock has recently entered oversold territory according to RSI indicators. The research firm's analysis indicates confidence in Standex's management team, highlighting their successful track record in capital allocation for over a decade. According to InvestingPro, the company has maintained dividend payments for 55 consecutive years, demonstrating consistent shareholder returns. According to the firm, Standex has effectively transformed from a mini-industrial conglomerate with limited growth, margins, and returns, mainly focused on food service equipment and niche products, into a specialty industrial platform with higher prospects for growth, margins, and returns. This transformation is reflected in the company's solid financials, with a healthy gross profit margin of 38.9% and strong liquidity, as evidenced by a current ratio of 3.37.
The firm's analyst commented on the potential for Standex's continued strong capital allocation and execution to further increase shareholder value in the coming years. This strategic shift by the company is seen as a positive move that has repositioned Standex in the market, making it an attractive option for investors looking for growth in the specialty industrial sector. With a market capitalization of $1.59 billion and analysts predicting profitability this year, InvestingPro analysis suggests the stock is currently fairly valued, with 12 additional ProTips available for subscribers.
The $175 price target set by Roth/MKM reflects the firm's expectations for Standex's future performance. It suggests a level of confidence in the company's ability to maintain its trajectory of transforming its business model and achieving higher financial metrics. The consensus among analysts is strongly bullish, with price targets ranging from $195 to $250, significantly above the current trading price.
Standex International's performance in the market will be watched closely by investors, as the company aims to continue its strategic initiatives under the guidance of its management team. The endorsement from Roth/MKM adds to the narrative that Standex is well-positioned for future growth and value creation.
Investors and market watchers will likely monitor Standex International's progress as it continues to execute its business strategy, with the Roth/MKM rating and price target serving as a benchmark for the company's potential in the specialty industrial space. For deeper insights into Standex's financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Standex International Corporation reported its fourth-quarter 2024 earnings, surpassing analysts' expectations with an earnings per share (EPS) of $1.91 compared to the forecasted $1.85. The company's revenue for the quarter was $189.8 million, exceeding the anticipated $187.61 million. Standex achieved a record adjusted operating margin of 18.7%, reflecting a significant improvement from the previous year. The company also announced executive changes, with Danielle Rangel being appointed as the new Vice President and Chief Accounting Officer, effective May 2, 2025. Rangel has been with the company since May 2023, previously serving as Vice President of Internal Audit and Investigations. Additionally, Standex's restructuring in the Engraving segment aims for $4 million in savings. The company has set ambitious long-term targets, aiming for sales exceeding $1.15 billion and an adjusted operating margin of over 23%, with significant contributions expected from its recent Ameren (NYSE:AEE) Orion Group acquisition. Analysts from firms like Barrington Research and William Blair have noted the company's robust operational efficiency and market strategies.
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