MSA Safety: Balancing Long-Term Growth Opportunities with Near-Term Challenges

Brian Brophy, an analyst from Stifel Nicolaus, has initiated a new Hold rating on MSA Safety (MSA).

Brian Brophy has given his Hold rating due to a combination of factors that influence both the short-term and long-term prospects of MSA Safety. In the long run, the company is poised to benefit from the upcoming SCBA replacement cycle, which is expected to commence as new safety standards are introduced. This cycle could significantly boost sales and margins, as SCBAs are a substantial part of MSA’s revenue. Additionally, the company’s focus on expanding its connected safety products and recurring revenue streams presents promising growth opportunities.
However, Brophy’s cautious stance in the near term is due to several challenges. The company faces tough comparisons following a significant Air Force order that previously inflated results. Tariff-related costs and a slowdown in short-cycle activities also pose potential headwinds. These factors contribute to the Hold rating, as the analyst awaits clearer indications of the SCBA replacement cycle’s impact on MSA’s performance.