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Valued at a market cap of $42.9 billion, AMETEK, Inc. (AME) manufactures and sells electronic instruments and electromechanical devices. The Berwyn, Pennsylvania-based company sells its products globally through two operating groups, the Electronic Instruments Group and the Electromechanical Group.
Shares of this electronic instruments manufacturer have lagged behind the broader market over the past 52 weeks. AMETEK has gained 10.1% over this time frame, while the broader S&P 500 Index ($SPX) has soared 20.5%. On a YTD basis, the stock is up 2.9%, aligning with SPX.
Narrowing the focus, AME has underperformed the Industrial Select Sector SPDR Fund’s (XLI) 17.6% return over the past 52 weeks and a 4.6% gain on a YTD basis.
On Feb. 4, shares of AME closed down nearly 2% after its Q4 earnings release as the company delivered a mixed performance. The company reported adjusted earnings of $1.87 per share, up 11.3% year-over-year, surpassing Wall Street’s estimated $1.84. However, revenue rose by 1.7% to $1.8 billion but missed expectations by 2.8%. Investor sentiment was further impacted by a 3% decline in organic sales, driven primarily by inventory destocking in the Electromechanical Group (EMG).
In addition to that, For fiscal 2025, AMETEK anticipates macroeconomic uncertainties and expects low single-digit total and organic sales growth, with EPS guidance between $7.02 and $7.18.
For the current fiscal year, ending in December, analysts expect AME’s EPS to grow 4.7% year over year to $7.15. The company’s earnings surprise history is promising. It surpassed the Wall Street estimates in each of the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 10 “Strong Buy,” one “Moderate Buy,” two “Hold,” and one “Strong Sell” rating.
This configuration is modestly more bullish than three months ago, with eight analysts suggesting a “Strong Buy” rating.
On Feb. 5, RBC Capital analyst Deane Dray maintained an “Outperform” rating on AME but lowered its price target to $204, which indicates a 10% potential upside from the current levels.
The mean price target of $204.58 represents a 10.3% upside from AMETEK’s current price levels, while the Street-high price target of $225 suggests an upside potential of 21.3%.
