The next couple of quarters will be ugly ones for ITT Corp (ITT),
and with meaningful exposure to end-markets like aerospace, oil/gas,
and process industries like mining, it’s not unreasonable to think that
some of those recoveries will take a while. Even so, that overlooks this
mid-cap industrial’s strong friction business (brake pads) and its
significant short-cycle aftermarket exposures.
Given
where the shares are priced now, it seems to me that the market is
focused far more on what can go wrong with this story, and that’s a
little strange to me relative to other industrials with similar
end-market exposures. I fully expect an awful 2020 for ITT, but if
long-term revenue growth in the 3% to 4% range and low double-digit FCF
margins remain valid long-term assumptions, these shares are
meaningfully undervalued today.
Read more here:
ITT May Prove More Resilient Than The Market Believes
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