SPX Technologies Inc (SPXC) shares have outperformed its industrial peers and the broader market by about 25 points since reporting 1Q results in early May and “are now priced for perfection, in our view,” UBS analysts wrote in a note to clients.
As a result, they downgraded the stock to ‘Neutral’ from ‘Buy’, believing investor sentiment is likely peaking, yet raised their 12-month target price on SPX shares to $90 from $80 previously.
“As for the business trajectory, while we do expect SPXC to see continued healthy demand into 2024, we expect the rate of sales growth and margin expansion to decelerate from here,” the analysts wrote.
They do, however, remain positive on the company’s long-term outlook and are raising their earnings per share (EPS) estimates for 2023 by 4% and 2024 by 7%, reflecting closing of its ASPEQ acquisition.
SPX is a global supplier of highly engineered HVAC products and detection and measurement technologies, with products ranging from cooling towers, commercial and residential boilers to pipe/ conduit detection equipment and fare collection systems.
Shares of SPX Technologies fell 7% to $79.50 in afternoon trading on Wednesday but have gained 20% year to date.
Contact Sean at sean@proactiveinvestors.com