Gold prices bounce off 3-week lows; demand likely longer term
Investing.com -- Truist upgraded Oshkosh (NYSE:OSK) Corp to Buy from Hold and raised its price target to $127 from $93, citing a compelling valuation, strong backlog in the vocational segment, and trough-level defense margins poised to recover.
“Oshkosh is the cheapest name within our Machinery coverage universe,” the firm wrote, pointing to the stock trading at just 8.3x forward earnings and 5.9x EV/EBITDA, about a 40% discount to the broader group.
The new price target implies 29% upside and is based on 11x the firm’s revised 2026 EPS estimate of $12.55.
Truist sees Oshkosh’s vocational segment as a key driver, representing 45% of the company’s $14.6 billion backlog and projected to contribute 58% of FY25 profits.
Vocational margins have expanded significantly over the past decade, and a fire truck backlog now extends beyond three years.
In the defense segment, Truist believes the worst is over, with margins expected to improve in 2026 as repriced legacy contracts become accretive and Next (LON:NXT) Generation Delivery Vehicle (NGDV) production ramps.
Oshkosh is targeting 16,000–20,000 NGDV units annually once full-rate production is achieved in late 2025.
Brokerage noted weakness in the Access Equipment (AE) business, which is guiding to a 15% revenue decline in 2025. However, Truist argued that the market is overly bearish, pricing in a scenario with 22% AE sales declines and steep margin compression.
Even under that extreme case, the stock would be trading at 15x EPS, versus a typical trough multiple of 20x.
Calling the setup attractive, Truist sees strong earnings visibility, a healthy balance sheet, and upside potential into 2026 across all business segments.