On Wednesday, Chart Industries , Inc. (NYSE:GTLS), a leading manufacturer of highly engineered equipment servicing multiple applications in the energy and industrial gas markets, received a price target increase from a BTIG analyst. The new target is set at $170.00, up from the previous $160.00, while the Buy rating on the stock remains unchanged.
The company's stock saw an approximate 11% increase midmorning after releasing its earnings report. Chart Industries reported adjusted EBITDA of around $245 million, which, despite being roughly 4% below the consensus estimate of approximately $255 million, was mitigated by higher-than-anticipated gross margins.
These margins reached about 33%, exceeding consensus by approximately 100 basis points, marking an increase of roughly 220 basis points sequentially and about 480 basis points year-over-year. The improvement in margins was attributed to cost synergies and robust performance in the after-market services sector.
Furthermore, Chart Industries provided its fiscal year 2024 earnings per share (EPS) guidance in the range of $12.00 to $14.00, with the midpoint notably 18% above the consensus estimate of $11.04.
The adjusted EBITDA guidance for the same period is set between $1.175 billion and $1.3 billion, with the midpoint surpassing the consensus by approximately 9%. Still, it is worth noting that this midpoint is also around 5% below the company's previous guidance.
Revenue guidance for 2024 was announced to be between $4.7 billion and $5.0 billion, with the midpoint slightly above the consensus of $4.7 billion. The company's backlog, covering about 63% of its revenue, stands at approximately $4.3 billion, showing a sequential increase of around 3%. The current book-to-bill ratio has been reported at approximately 1.19x, a slight decrease from the last quarter's 1.26x.
In their comments, BTIG highlighted the company's better margins, increased orders, effective cost synergy management, and an improving mix, particularly in the Repair, Service, and Leasing (RSL) segment.
The management's guidance for 2024 anticipates a free cash flow in the range of approximately $575 million to $625 million, which is expected to provide sufficient capacity for the company to continue reducing its debt.
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