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Modine Manufacturing Company (MOD)
NYSE:MOD
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Modine
(NYSE:MOD)
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Rating:69Neutral
Price Target:
$225.00
▲(2.51% Upside)
The score is supported by a strong operational turnaround and upbeat, raised guidance driven by rapid Climate Solutions/data-center growth, but is held back by weaker recent cash flow/cash conversion and a very high valuation. Technically the trend is strong, though overbought indicators add near-term downside risk.
Positive Factors
Data-center Climate Solutions growth
Exceptional, recurring data‑center demand gives Modine a durable growth engine: 78% YoY data‑center sales and $1B+ target support sustained revenue scale, justify capacity buildouts, and diversify end markets away from cyclical auto/industrial exposure over the next 2–4 years.
Technology leadership and capacity expansion
Progressive capacity adds align production capability with high‑growth data‑center demand, reducing supply constraints and enabling volume economics. A larger installed base and proprietary chiller platforms support pricing power, faster delivery, and durable margin improvement as utilization ramps.
Multi-year revenue and margin turnaround
Consistent top‑line growth and meaningful margin expansion versus prior years indicate operational leverage and better cost structure. Improving gross and EBITDA margins imply the business can convert additional sales into sustainable profit and fund reinvestment and deleveraging over time.
Negative Factors
Weakened cash conversion
Deteriorating cash conversion and lower FCF relative to earnings indicate more cash tied in working capital and investment. This constrains internal funding for capex and capacity builds, increases reliance on external financing, and poses a multimonth liquidity risk if growth monetization lags.
Higher absolute debt dollars
While leverage ratios improved historically, rising nominal debt levels and recent net‑debt increases reduce financial flexibility. If cash generation remains uneven, higher debt dollars limit ability to fund expansion, raise dividends, or pursue M&A without added refinancing or covenant pressure.
Performance Technologies end‑market softness
A weak Performance Technologies segment undermines portfolio diversification and introduces earnings volatility. Persistently soft end markets, pass‑through timing and conversion costs can depress PT margins and cash flow, offsetting Climate Solutions gains and complicating consolidated margin stability.
Modine (MOD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.57B
Dividend YieldN/A
Average Volume (3M)1.63M
Price to Earnings (P/E)121.9
Beta (1Y)2.08
Revenue Growth8.10%
EPS Growth13.52%
CountryUS
Employees11,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.19
Shares Outstanding52,731,197
10 Day Avg. Volume2,288,647
30 Day Avg. Volume1,629,664
Financial Highlights & Ratios
PEG Ratio1.61
Price to Book (P/B)4.44
Price to Sales (P/S)1.56
P/FCF Ratio31.22
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue4.24
Enterprise Value/Gross Profit17.81
Enterprise Value/Ebitda46.10
Forecast
1Y Price Target
$243.00Price Target Upside10.71% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)4.84
Revenue Forecast (FY)$3.13B
Modine Business Overview & Revenue Model
Company DescriptionModine Manufacturing Company provides engineered heat transfer systems and heat transfer components for use in on- and off-highway original equipment manufacturer (OEM) vehicular applications. It operates through Climate Solutions and Performance Technologies segments. The company offers gas-fired, hydronic, electric, and oil-fired unit heaters; indoor and outdoor duct furnaces; infrared units; perimeter heating products, such as commercial fin-tube radiation, cabinet unit heaters, and convectors; roof-mounted direct- and indirect-fired makeup air units; unit ventilators; single packaged vertical units; precision air conditioning units for data center applications; air handler units; fan walls; chillers; ceiling cassettes; hybrid fan coils; and condensers and condensing units. It also provides microchannel, heat recovery, round tube plate fin, and motor and generator cooling coils; evaporator unit, fluid, transformer oil, gas, air blast, and dry and brine coolers, as well as remote condensers; and coatings to protect against corrosion. In addition, the company offers powertrain cooling products, including engine cooling modules, radiators, charge air coolers, condensers, oil coolers, fan shrouds, and surge tanks; on-engine cooling products comprising exhaust gas recirculation, engine oil, fuel, charge air, and intake air coolers; auxiliary cooling products, such as transmission and retarder oil coolers, and power steering coolers; and complete battery thermal management systems and electronics cooling packages. It serves heating, ventilation, and cooling OEMs; construction architects and contractors; wholesalers of heating equipment; automobile, truck, bus, and specialty vehicle OEMs; agricultural, industrial, and construction equipment OEMs; and commercial and industrial equipment OEMs. The company has operations in North America, South America, Europe, and Asia. Modine Manufacturing Company was incorporated in 1916 and is headquartered in Racine, Wisconsin.
How the Company Makes MoneyModine generates revenue primarily through the sale of its thermal management products and systems across various sectors. Key revenue streams include the sale of heat exchangers and cooling systems for the automotive industry, which is a significant contributor to its earnings. Additionally, Modine earns revenue from its HVAC and industrial segment, providing solutions for commercial buildings and manufacturing processes. The company also benefits from strategic partnerships with major automotive manufacturers and other industrial players, which enhance its market reach and product development capabilities. Factors such as increasing demand for energy-efficient solutions and regulatory support for sustainable technologies further contribute to Modine's earnings.
Modine Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and strategic momentum driven by exceptional Climate Solutions growth—particularly in data centers—with meaningful margin expansion, raised revenue and EBITDA guidance, and a strategic transaction (PT spin-off and Gentherm combination) that provides cash and shareholder participation in the combined business. Near-term headwinds include negative free cash flow in the quarter due to inventory and CapEx builds, a noncash pension settlement loss, increased net debt, material cost pass-through timing affecting PT and HTS margins, and a temporary expected Q4 PT margin dip. Overall, the company emphasized confidence in long-term targets (data center revenue growth, capacity expansion and margin improvement) while acknowledging manageable near-term cash and margin timing pressures.Q3-2026 Updates
Positive Updates
Strategic Transaction: Performance Technologies Spin-Off and Combination with Gentherm
Modine to receive approximately $210 million in cash and Modine shareholders to receive stock equal to 40% of the combined business; values the Performance Technologies business at $1.0 billion (6.8x 12-month trailing EBITDA). Transaction expected to close in Q4 calendar year, intended to accelerate portfolio transformation and unlock shareholder value.
Climate Solutions Revenue Surge
Climate Solutions revenues increased 51% year-over-year (organic growth 36%), driven by strong data center demand and acquisitions; HVAC Technologies sales up 48% and Heat Transfer Solutions up 14%.
Data Center Growth and Orders
Data center sales grew 78% year-over-year (+$130 million) and 31% sequentially in Q3; record order intake reported; company remains on track to exceed $1 billion in data center sales this year and targets $2 billion by fiscal 2028; updated expectation of 50% to 70% annual data center revenue growth over the next two years.
Capacity Expansion Progress
Commissioned 4 new chiller lines in Q3 (including first 2 lines in Jefferson City); 4 additional lines scheduled in Q4 and initial production launched in Franklin, WI. Management expects capacity to be in place to support long-term targets (20 chiller lines by fiscal '28).
Segment Margin Improvements
Performance Technologies adjusted EBITDA margin increased 400 basis points to 14.8%; Climate Solutions adjusted EBITDA improved 29% with a Q3 margin of 17.9% and management targets ~20%–21% for Climate Solutions in Q4.
Consolidated Financial Performance
Total company sales increased 31% year-over-year; gross profit increased 24%; adjusted EBITDA improved 37% year-over-year with consolidated adjusted EBITDA margin up 70 basis points to 14.9%; adjusted EPS increased 29% to $1.19 (excluding a $116M noncash pension settlement loss).
Raised Full-Year Guidance
Fiscal 2026 outlook raised: total sales now expected to grow 20%–25%; Climate Solutions sales raised to 40%–45% growth (from 35%–40%); data center sales expected to grow in excess of 70% this year; full-year adjusted EBITDA guidance increased to $455 million–$475 million.
Balance Sheet and Leverage
Net debt of $517 million (up $238 million YoY) but leverage ratio remains modest at 1.2x; company expects leverage to decline by fiscal year-end and anticipates positive free cash flow in Q4.
Product and Technology Leadership
Launched a new 3-megawatt turbo chilled chiller platform designed for high-density next-generation GPU-powered data centers; management emphasizes technology leadership, energy efficiency (PUE improvements) and flexibility across product lines.
Negative Updates
Negative Free Cash Flow and Elevated Working Capital
Free cash flow was negative $17 million in Q3 due primarily to inventory builds and higher CapEx tied to Climate Solutions capacity expansion; management noted elevated working capital and CapEx that will partially carry into the next fiscal year.
Net Debt Increase and Near-Term Cash Payments
Net debt increased by $238 million year-over-year to $517 million, reflecting three acquisitions and incremental data center investments; Q3 included ~$24 million of cash payments related to U.S. pension plan termination.
Pension Termination Noncash Loss
A $116 million noncash settlement loss was recorded in connection with the termination of the U.S. pension plan (excluded from adjusted EPS), though termination removed a liability from the balance sheet.
Performance Technologies Market Weakness
End markets for Performance Technologies remain challenged with volumes down; while revenue was up 1% YoY, management expects PT sales to be flat to down 7% for the full year and anticipates a temporary step-down in PT EBITDA margin in Q4 due to material pass-through timing, tariff recovery timing, inventory cleanup write-offs and plant conversions.
Margin Pressure in Heat Transfer Solutions
Heat Transfer Solutions experienced margin pressure from spikes in material costs (aluminum, copper, steel) with a lag in pass-through pricing; SG&A increased 9% consolidated largely due to Climate Solutions investment activity.
CapEx and Investment Carryover
Capital spending remains elevated: full-year CapEx now expected in range of $150 million–$180 million with some data center capital investments carrying into the next fiscal year; management noted this year’s investments were higher than normal and will normalize over time.
Company Guidance
Management raised its fiscal 2026 outlook and provided detailed metric targets: they now expect total sales to grow 20–25% and Climate Solutions revenue to grow 40–45% (data‑center sales up in excess of 70% this year), and they raised fiscal‑26 adjusted EBITDA to $455–$475 million; they reiterated a >$1 billion data‑center sales target for this year and $2 billion by FY2028, with updated data‑center revenue growth of 50–70% annually over the next two years. Q3 results that underpin the guidance included consolidated sales +31% YoY, gross profit +24%, adjusted EBITDA +37% to a 14.9% margin (up 70 bps), adjusted EPS $1.19 (up 29%, ex a $116M noncash pension settlement), Climate Solutions revenue +51% (organic +36%) with data centers +78% YoY and a 31% sequential Q3 ramp, Climate Solutions adj. EBITDA margin at 17.9% with an expected Q4 margin of ~20–21% (200+ bps sequential improvement), and Performance Technologies revenue +1% with adj. EBITDA margin up 400 bps to 14.8% though PT sales are expected to be flat to down 7%. Cash and balance‑sheet guidance: Q3 free cash flow was negative $17M (including $24M of pension‑related cash payments), net debt $517M (up $238M YoY) with leverage 1.2, CapEx now expected $150–$180M for the year (some spend carrying into next fiscal year), and management expects positive free cash flow in Q4 and further leverage reduction by year‑end.Modine Financial Statement Overview
Summary
Strong multi-year turnaround with higher revenue and materially improved margins, but the latest TTM shows weaker net income versus FY2025 and softer cash conversion/free cash flow, alongside higher TTM debt dollars.Income Statement
Results show a strong multi-year turnaround and improving profitability. Revenue rose from $1.81B (FY2021) to $2.58B (FY2025 annual) and $2.87B in TTM (Trailing-Twelve-Months), with positive growth in the most recent period. Margins expanded meaningfully versus earlier years (EBITDA margin improved from negative in FY2021 to ~13% in TTM), and gross margin also strengthened (about 17% in FY2023 to ~24% in TTM). The key weakness is earnings quality/consistency: net income dropped to $97.8M in TTM from $184.0M in FY2025 annual, despite higher revenue, suggesting recent margin or cost pressure.82
Very Positive
Balance Sheet
Leverage looks reasonable and improved materially from earlier years. Debt relative to equity moved down from ~0.96 (FY2021) and ~0.84 (FY2022) to ~0.49–0.55 in FY2025 annual and TTM (Trailing-Twelve-Months). Equity has grown alongside assets, and returns on equity are strong (~19–22% in FY2024–TTM), indicating solid profitability on the capital base. The main watch-out is debt dollars have increased in TTM ($615.8M) versus FY2025 annual ($449.4M), which can reduce flexibility if cash generation softens.74
Positive
Cash Flow
Cash generation is positive but has recently weakened. Operating cash flow fell to $136.3M in TTM (Trailing-Twelve-Months) from $213.3M in FY2025 annual, and free cash flow declined to $49.2M with negative growth in TTM. Cash conversion is a notable concern: free cash flow is only ~40% of net income in TTM (vs ~61% in FY2025 annual), implying more earnings tied up in working capital or higher spending. A strength is the company has demonstrated the ability to generate meaningful free cash flow in recent annual periods (FY2023–FY2025), despite volatility earlier in the cycle.60
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.87B | 2.58B | 2.41B | 2.30B | 2.05B | 1.81B |
| Gross Profit | 684.00M | 645.40M | 527.20M | 389.40M | 309.30M | 293.40M |
| EBITDA | 264.30M | 358.10M | 294.80M | 208.00M | 171.90M | -31.30M |
| Net Income | 97.80M | 184.00M | 161.50M | 153.10M | 85.20M | -210.70M |
Balance Sheet | ||||||
| Total Assets | 2.48B | 1.92B | 1.85B | 1.57B | 1.43B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 98.90M | 71.60M | 60.10M | 70.60M | 48.90M | 37.80M |
| Total Debt | 867.10M | 530.00M | 571.10M | 462.30M | 472.90M | 435.30M |
| Total Liabilities | 1.35B | 999.40M | 1.10B | 966.30M | 968.90M | 920.60M |
| Stockholders Equity | 1.12B | 910.20M | 747.60M | 592.80M | 450.70M | 348.70M |
Cash Flow | ||||||
| Free Cash Flow | 7.40M | 129.30M | 126.10M | 56.80M | -28.80M | 117.10M |
| Operating Cash Flow | 136.30M | 213.30M | 214.60M | 107.50M | 11.50M | 149.80M |
| Investing Cash Flow | -307.60M | -86.60M | -283.40M | -50.40M | -51.00M | -31.30M |
| Financing Cash Flow | 210.40M | -113.60M | 62.70M | -33.30M | 39.20M | -145.10M |
Modine Technical Analysis
Positive
219.50
Price Trends
153.68
Positive
151.60
Positive
131.55
Positive
Market Momentum
21.37
Negative
85.83
Negative
86.06
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOD, the sentiment is Positive. The current price of 219.5 is above the 20-day moving average (MA) of 172.28, above the 50-day MA of 153.68, and above the 200-day MA of 131.55, indicating a bullish trend. The MACD of 21.37 indicates Negative momentum. The RSI at 85.83 is Negative, neither overbought nor oversold. The STOCH value of 86.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MOD.
Modine Risk Analysis
Modine disclosed 30 risk factors in its most recent earnings report. Modine reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Modine Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.07B | 16.59 | 18.19% | ― | 7.94% | 34.84% | |
73 Outperform | $7.20B | 17.04 | 9.05% | 2.63% | -1.90% | -13.86% | |
72 Outperform | $9.69B | 14.26 | 40.38% | 1.07% | -4.21% | -0.45% | |
69 Neutral | $11.57B | 121.86 | 9.89% | ― | 8.10% | 13.52% | |
64 Neutral | $17.82B | 66.51 | 3.25% | ― | 2.16% | -85.91% | |
62 Neutral | $14.14B | 51.64 | 5.05% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
MOD
Modine
219.50
127.14
137.66%
ALSN
Allison Transmission Holdings
116.45
13.91
13.57%
BWA
BorgWarner
66.10
36.30
121.81%
APTV
Aptiv
83.76
16.76
25.01%
DORM
Dorman Products
133.27
6.28
4.95%
LEA
Lear
138.88
43.35
45.38%
Modine Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Modine Expands Revolving Credit Facility to Boost Liquidity
Positive
Dec 29, 2025
On December 23, 2025, Modine Manufacturing Company and its subsidiary Airedale International Air Conditioning amended their existing credit agreement to increase the aggregate revolving credit commitments by $150 million, from $400 million to $550 million, and revised the expansion feature to allow up to $250 million in future incremental revolving commitments and term loans. The amendment also grants Modine, under specified conditions and at its own expense, the right to compel a lender to assign and delegate its loans and commitments to an eligible replacement lender upon full payment of the outgoing lender, enhancing the company’s financing flexibility and potential access to additional liquidity for operational and strategic needs.
The most recent analyst rating on (MOD) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Modine stock, see the MOD Stock Forecast page.
Executive/Board Changes
Modine Announces Retirement of Climate Solutions President
Neutral
Dec 9, 2025
On December 4, 2025, Modine Manufacturing Company announced the planned retirement of Eric S. McGinnis, President of Climate Solutions, effective June 30, 2026. During the transition period, McGinnis will continue in his role to ensure a smooth transition and will receive his regular compensation and benefits. The agreement includes provisions for the vesting of equity awards and pro rata payouts of performance stock awards, contingent on McGinnis’s continued employment and fulfillment of certain conditions.
The most recent analyst rating on (MOD) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Modine stock, see the MOD Stock Forecast page.
Executive/Board Changes
Modine Board Member Christopher Patterson to Retire
Neutral
Nov 14, 2025
On November 10, 2025, Christopher W. Patterson, a member of Modine Manufacturing Company’s Board of Directors, announced his intention to retire from the board effective November 17, 2025, citing personal reasons. His departure will result in the reduction of the board’s size from eleven to ten members, and he did not express any disagreements with the company’s operations, policies, or practices.
The most recent analyst rating on (MOD) stock is a Hold with a $138.00 price target. To see the full list of analyst forecasts on Modine stock, see the MOD Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.