KeyBanc raised the firm’s price target on Lincoln Electric (LECO) to $230 from $210 and keeps an Overweight rating on the shares. The firm cites its expectation that the cycle is near bottom, and as it improves, Lincoln Electric will benefit from strong revenue growth and incremental margin, “but this is not an easy call.” Looking into the next few quarters, KeyBanc has concerns about automotive capex, lingering weakness in Heavy Industries and International welding, and when one will see improvement in the broader industrial cycle. What the firm does like, on the other hand, is its view that “we’re closer to the bottom of the broader industrial cycle,” how durable the company’s margins have been in the face of negative organic growth, and that when the automotive automation orders come, they could be sizable, benefiting revenue and absorption.
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