Truist cuts Minerals Technologies target to $92, maintains Buy

On Monday, Truist Securities revised its price target for Minerals Technologies (NYSE:MTX) shares, bringing it down to $92 from the previous $101 while still affirming a Buy rating on the stock. Currently trading at a P/E ratio of 11x and an EV/EBITDA multiple of 6.6x, InvestingPro analysis indicates the stock is undervalued. The reevaluation by Truist comes amid a reassessment of the company’s sales and earnings forecasts for the years 2025 and 2026, particularly within its Engineered Solutions business, which is more exposed to industrial fluctuations.

Peter Osterland of Truist Securities has expressed confidence in the company’s ability to maintain stable earnings despite the downward adjustment in the price target. The rationale behind the maintained Buy rating is rooted in Minerals Technologies’ diversified end-market exposure, which includes a consumer-oriented portfolio considered relatively defensive against market volatility. This stability is reflected in the company’s 33-year track record of consecutive dividend payments and strong financial health metrics, as highlighted by InvestingPro data.

The lowered price target of $92 is based on a reduced earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple of 8.0 times for the year 2026, which is a slight decrease from the previously used multiple of 8.5 times. This new multiple is aligned with the historical average for Minerals Technologies, indicating an attempt to base the target on consistent performance metrics over time.

Truist’s revised estimates reflect a conservative outlook for Minerals Technologies, with modest reductions in both sales and earnings projections for the next two years. The adjustments are more pronounced in the Engineered Solutions segment, suggesting that the industrial side of the business could face greater challenges compared to the company’s other operations.

The Truist Securities analyst concluded by emphasizing the company’s track record of stable earnings, which appears to be a key factor in the decision to retain a positive stance on the stock despite the lowered price target. The current valuation, according to the analyst, already factors in potential downside risks to earnings, which may be less severe than what the market has priced in. With earnings scheduled for April 24 and a remarkably low PEG ratio of 0.11, investors seeking detailed analysis can access the comprehensive Pro Research Report available on InvestingPro, which includes additional valuable metrics and expert insights.

In other recent news, MTU Aero Engines (OTC:MTUAY) reported robust financial results for the fourth quarter of 2024, with a notable 18% increase in adjusted revenue, reaching €7.5 billion. The company also achieved a 29% rise in adjusted EBIT, totaling €1.05 billion, surpassing its mid-term EBIT target a year ahead of schedule. Additionally, MTU Aero Engines secured $5.6 billion in commercial maintenance, repair, and overhaul (MRO) contracts, signaling strong market demand. The company’s adjusted net income grew by 29% to €764 million, supported by a favorable business mix across all segments.

Looking ahead, MTU Aero Engines provided revenue guidance for 2025, anticipating a range of €8.7-8.9 billion, with mid-to-high single-digit growth expected in its military business. The commercial new engine business is projected to see mid-teens percentage growth. The company also forecasts a mid-teens percentage increase in adjusted EBIT for the upcoming year. Analyst feedback from firms such as JPMorgan and UBS highlighted the company’s strategic positioning and market confidence, despite ongoing supply chain challenges. These developments underscore MTU Aero Engines’ strong financial performance and positive outlook for 2025.

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