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On Tuesday, UBS reiterated its Buy rating on Chart Industries (NYSE:GTLS) shares with a steady price target of $225.00, well above the current trading price of $142.54. The company maintains a "GOOD" overall financial health score according to InvestingPro analysis, with a perfect Piotroski Score of 9. The firm’s analysts adjusted their first quarter 2025 EBITDA estimate for Chart Industries to $223 million compared to the consensus estimate of $233 million on the Street. This anticipated EBITDA reflects an increase of $11 million year-over-year but a decrease of $61 million quarter-over-quarter. With the stock currently trading below its Fair Value, InvestingPro subscribers can access 12 additional key insights and a comprehensive Pro Research Report that provides deep-dive analysis of the company’s fundamentals.
The analysts highlighted that foreign exchange rates, which acted as a tailwind in the first quarter of 2024, are not expected to provide the same benefit in the first quarter of 2025. Sales are estimated to reach $995 million in the first quarter of 2025, a decline from $1,107 million in the fourth quarter of 2024 but an increase from $951 million in the first quarter of the previous year.
Chart Industries is projected to face a free cash flow (FCF) deficit of $85 million in the first quarter of 2025, which is an improvement from the $135 million deficit recorded in the first quarter of 2024, and a significant drop from the $261 million positive free cash flow in the fourth quarter of 2024. The company generated $382.2 million in levered free cash flow over the last twelve months, with a debt-to-equity ratio of 1.32 by the end of the fourth quarter of 2024.
The first quarter is traditionally the weakest for Chart Industries, but UBS analysts anticipate the company will resume its deleveraging process starting in the second quarter of 2025. They forecast a free cash flow of $168 million for the second quarter and a total of $400 million for the full year of 2025. The company has demonstrated strong growth with revenue increasing 24.1% over the last twelve months to $4.16 billion, supporting analysts’ positive outlook.
In other recent news, Chart Industries reported its fourth-quarter earnings for 2024, which fell short of expectations. The company announced earnings per share of $2.66, missing the forecasted $3.15, and revenue of $1.11 billion, below the anticipated $1.18 billion. Despite these setbacks, Chart Industries remains optimistic about its future, maintaining its 2025 growth outlook across all segments. Moody’s Ratings recently upgraded Chart Industries’ corporate family rating to Ba3 from B1, citing strong backlog and order growth, which is expected to support a 9% revenue growth in 2025. The company has also been selected by Blue Spruce Operating to supply a Nitrogen Rejection Unit and helium processing technology for the Dry Piney Helium and Carbon Sequestration Project in Wyoming. Additionally, Stifel analysts reiterated a Buy rating on Chart Industries, maintaining a price target of $231, highlighting the company’s strong order book and better-than-expected free cash flow. JPMorgan maintains a Neutral rating on the company, with a $194 price target, expecting significant cash flow increases driven by the Big LNG order from Woodside (OTC:WOPEY) Phase 1. These developments reflect Chart Industries’ ongoing efforts to strengthen its financial position and expand its market presence.
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