Vontier Prepared For A Solid 2024 With Revenue And Margin Growth: Analyst

Zinger Key Points
  • Vontier upgraded to Buy, target raised to $40; Analyst anticipates growth and margin expansion in 2024.
  • The outlook includes 4% organic revenue CAGR, margin expansion, and contract wins for iNFX payments platform.

BofA Securities analyst Andrew Obin upgraded Vontier Corp VNT to Buy from Neutral at an increased price target of $40 (from $37).

The analyst sees more room to run for the company and forecasts all-in organic revenue growth and margin expansion in 2024 as U.S. fuel dispenser headwinds fade.

Obin expects 4% organic revenue CAGR and 170bps cumulative adjusted operating margin expansion to drive a 10% adj. EPS CAGR (FY23-FY26).  

The analyst's FY24 estimates now exclude the completed Coats divestiture and despite this, their FY24E adj. EPS is higher at $3.14 (vs. $3.09 consensus) and FY25 adj. EPS is $0.16 higher at $3.51 (+12% Y/Y). 

The analyst also expects contract wins for the iNFX payments platform to add to multi-year visibility and organic FCF generation (BofA FY24 $468 million) to be led by proceeds from the Coats divestiture. 

Price Action: VNT shares are trading higher by 2.64% at $34.45 on the last check Thursday.

 

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