JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Monday, Barnes Group (NYSE:B), an industrial and aerospace manufacturer and service provider, was downgraded by DA Davidson from Buy to Neutral. The firm also adjusted the stock price target to $47.50 from the previous target of $52.00. This rating change follows the announcement that Barnes Group has entered into a definitive agreement to be acquired by Apollo Global Management (NYSE:APO), Inc. in an all-cash transaction.
The deal values Barnes Group at approximately $3.6 billion, or $47.50 per share, which is based on 10 times the company's projected 2025 earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).
The acquisition by Apollo Global Management represents a strategic move for the enterprise, with the offer price reflecting a valuation that DA Davidson considers likely to be the best possible outcome for Barnes shareholders at this time. The transaction is expected to provide a cash payout to shareholders at the agreed price per share.
DA Davidson cited the acquisition announcement as the primary reason for the downgrade, indicating that the firm sees the buyout offer as a cap on the stock's potential, justifying the reduction in the price target to align with the offer price. The new price target of $47.50 matches the per-share price offered by Apollo Global Management.
The definitive agreement between Barnes Group and Apollo marks a significant point of transition for the company, with the acquisition set to take place as an all-cash transaction. This deal will result in Barnes Group becoming a privately held company, subject to the terms and conditions outlined in the agreement.
Investors and market watchers will be monitoring the progress of the acquisition closely as it moves towards completion, noting the alignment of the price target with the valuation agreed upon in the definitive acquisition agreement.
In other recent news, Barnes Group Inc . is set to be acquired by Apollo Global Management in a deal worth approximately $3.6 billion. This acquisition, pending customary closing conditions and regulatory clearances, is expected to conclude by the end of Q1 2025. As part of the agreement, Barnes shareholders will receive $47.50 per share in cash.
In financial developments, Barnes Group reported a 13% increase in revenue, reaching $382 million, and a 14% rise in adjusted EBITDA to $76 million. However, the company experienced a decrease in earnings per share. Furthermore, Oppenheimer has maintained an Outperform rating for Barnes Group, suggesting a purchase price of $55 per share based on projected earnings.
In other company news, Barnes Group announced the appointment of Troy W. Ingianni as the new Principal Accounting Officer. This executive shift comes as part of a planned transition, with the current Vice President, Controller, and Principal Accounting Officer, Marian Acker, shifting to a Senior Advisor role. These are among the recent developments shaping Barnes Group's business trajectory.
InvestingPro Insights
The recent acquisition announcement and subsequent downgrade by DA Davidson align with several key insights from InvestingPro. Barnes Group's stock has shown significant momentum, with InvestingPro data indicating a 23.49% price total return over the past month and a 27.36% return over the last six months. This strong performance has pushed the stock to trade near its 52-week high, with the current price at 99.89% of that peak.
InvestingPro Tips highlight that Barnes Group has maintained dividend payments for 54 consecutive years, showcasing its historical commitment to shareholder returns. This consistent dividend policy may have contributed to its attractiveness as an acquisition target. Moreover, the company's liquid assets exceeding short-term obligations suggest a solid financial position, which could have been a factor in Apollo's valuation.
The acquisition price of $47.50 per share appears to be in line with the fair value estimates provided by InvestingPro. The InvestingPro Fair Value is calculated at $45.62, while the Fair Value based on analyst targets is slightly higher at $48.34. These figures support DA Davidson's view that the buyout offer likely represents the best outcome for shareholders at this time.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Barnes Group, providing a deeper understanding of the company's financial health and market position.
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