Company TransformationGates Industrial Corp is rated Overweight with a price target of $35, reflecting confidence in the company's ability to convert its legacy in engineered power transmission into a structurally stronger, innovation-driven, and operationally resilient platform.
Market PositionGates has a #1 global position in power transmission, with around 70% of aftermarket sales, well-protected margins, robust free cash flow conversion, and net leverage on track to fall below 1.5x by 2026.
Operational ResilienceGates demonstrates operational resilience and cash-driven discipline with gross margins above 40% for five straight quarters and free cash flow conversion exceeding 90%.