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Berwyn, Pennsylvania-based AMETEK, Inc. (AME) manufactures and sells electronic instruments and electromechanical devices. It operates through the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG) segments. With a market cap of $39.2 billion, AMETEK’s operations span the Americas, Asia, Europe, and internationally. It is expected to release its Q3 earnings before the market opens on Thursday, Oct. 31.
Ahead of the event, analysts expect AMETEK to report a profit of $1.62 per share, down 1.2% from $1.64 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 5.7% year-over-year to $1.66, exceeding the consensus estimates by 1.2%
For fiscal 2024, analysts expect AMETEK to report an adjusted EPS of $6.76, up 6% from $6.38 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 7.7% year-over-year to $7.28.
AME has gained 2.7% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 21.9% gains and the Industrial Select Sector SPDR Fund’s (XLI) 21.2% returns during the same time frame.
Shares of AMETEK plummeted 8.3% after the release of its Q2 earnings on Aug. 1. Although the company surpassed Wall Street’s earnings estimates, its net sales fell short of expectations, increasing 5.4% year-over-year to $1.7 billion. Additionally, AMETEK gave an adjusted EPS guidance of $1.60 to $1.62 for Q3 representing a 1% to 2% decline year-over-year, making investors jittery. Moreover, due to rising expenses the company observed a net margin contraction of 23 basis points leading to a slower growth in profits compared to revenues. Its net income for the quarter grew by 4.1% year-over-year to $337.7 million.
Nonetheless, AMETEK gave a better full-year outlook and expects its overall sales to grow by 5% to 7% and adjusted EPS to range between $6.70 to $6.80, up 5% to 7% from 2023.
The consensus opinion on AME stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 14 analysts covering the stock, eight recommend “Strong Buy,” one advises “Moderate Buy,” four suggest “Hold,” and one gives a “Strong Sell” rating. The mean price target of $187.33, represents a potential upside of 10.6% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
