Strategic Shift and Merger Synergies Drive Buy Rating for Chart Industries

BTIG analyst Gregory Lewis has maintained their bullish stance on GTLS stock, giving a Buy rating today.

Gregory Lewis has given his Buy rating due to a combination of factors related to Chart Industries’ strategic moves and financial outlook. The company is making a significant shift towards the aftermarket sector, which is expected to provide higher margins and more stable revenue streams. This strategic pivot is highlighted by the planned merger with Flowserve, which will create a strong aftermarket presence, with aftermarket services making up a substantial portion of the combined entity’s revenue.
Furthermore, the merger is anticipated to generate significant cost synergies, with management targeting $300 million in savings over three years. This will also help in deleveraging the company, improving its financial health by reducing net leverage. Additionally, the transaction is expected to enhance Chart Industries’ financial position by aiming for an investment-grade rating, which could lead to further savings through reduced financing costs. These factors collectively underpin Lewis’s positive outlook on the stock.

Based on the recent corporate insider activity of 74 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of GTLS in relation to earlier this year.