Allient’s Industrial Market Is Improving, Analyst Upgrades Stock Citing Expected Bottom-Line Growth

Northland Capital Markets analyst Ted Jackson upgraded Allient Inc. ALNT from Market Perform to Outperform and raised the price forecast from $30 to $35.

The analyst notes the industrial market is improving and expects the negative impact from a weaker vehicle market to lessen as FY25 progresses.

These trends enhance the confidence in the sales projections, and an improving margin structure driven by ongoing restructuring further strengthens the outlook for bottom-line growth, adds the analyst.

The analyst is comfortable with his fourth-quarter estimates, projecting a 14.9% year-over-year sales decline to $120 million, which is almost in line with the consensus of $119.7 million.

The analyst writes that Allient has encountered multiple challenges over the past year, including a weaker macro environment and a notable decline in demand from its two largest customers and expects these issues to ease as FY25 progresses.

For FY25, Jackson estimates sales to decline slightly from $527.9 million in FY24 to $518.2 million, while adjusted EBITDA is projected to grow by 16.6% to $68.9 million.

However, the analyst is concerned that the FY25 consensus sales estimate is slightly too high, particularly for second half of FY25, which stands at $268.0 million versus his estimate of $262.4 million.

Price Action: ALNT shares are up 7% at $26.30 at the last check Tuesday.

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