Robert W. Baird analyst Andrew Wittmann upgraded the rating on UL Solutions Inc. Class A to a Buy today, setting a price target of $97.00.
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Andrew Wittmann’s rating is based on UL Solutions’ strong financial metrics, competitive positioning, and growth prospects. The company’s underlying earnings growth and return on invested capital (ROIC) in the mid-20% range create an attractive long-term investment opportunity, particularly with shares trading below their historical valuation multiples. Despite the stock recently underperforming, the current weakness is viewed as a chance to build a position in a high-quality business.
UL Solutions benefits from a recurring revenue model and strong exposure to growth markets in electrification and artificial intelligence. The company’s dominant market position, bolstered by robust customer relationships and barriers to entry, further solidifies its competitive edge. Additionally, margin improvements, cost-saving initiatives, and efficient lab operations provide confidence in management’s execution and future earnings growth. While the stock may appear expensive compared to some European peers, its valuation is justified when compared to U.S.-listed high-quality service companies with similar growth and profitability metrics.
In another report released on December 3, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $101.00 price target.
Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ULS in relation to earlier this year.