Craig-Hallum bullish on Mayville Engineering, initiates with a Buy

As previously reported, Craig-Hallum initiated coverage of Mayville Engineering (MEC) with a Buy rating and $24 price target The firm believes Mayville is an under-the-radar emerging beneficiary of data center buildouts that the market doesn’t yet understand. Following the acquisition of Accu-Fab which gave them exposure to DC customers, Craig-Hallum thinks this end market could become the largest revenue generating area within the next several years. P&L implications will be important given inherently higher margins for this space so it expects an upward re-rating in shares and potentially significant positive revision cycle over the next few years. If successful, the stock could eventually be valued similarly to other lower-margin data center beneficiaries, which could equate to a near $50 stock, the firm argues.