J.P. Morgan analyst Tami Zakaria has maintained their bullish stance on ATMU stock, giving a Buy rating yesterday.
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Tami Zakaria’s rating is based on several strategic factors that position Atmus Filtration Technologies, Inc. for growth. The proposed acquisition of Koch Filter is a significant move, expected to diversify ATMU’s portfolio and unlock valuation potential. This acquisition is anticipated to enhance ATMU’s revenue mix by increasing the share of industrial air filtration, which has a shorter replacement cycle and a strong aftermarket presence. Additionally, Koch’s exposure to the growing data center market is seen as a promising avenue for future revenue growth.
Furthermore, the acquisition is projected to be accretive to earnings per share in the first year, with an estimated annualized EPS increase, assuming a 70% debt financing structure. The core revenue growth algorithm is expected to accelerate, driven by Koch’s historical growth rates and potential synergies. Fast deleveraging is also anticipated, with the net leverage ratio expected to decrease significantly by mid-2027. Lastly, the sentiment around first-fit is improving, with regulatory changes expected to boost truck builds in North America, supporting ATMU’s valuation. These factors collectively justify the Buy rating and the increased price target.
In another report released yesterday, Northland Securities also maintained a Buy rating on the stock with a $59.00 price target.