IPG Photonics Likely To Gain From China's Recovery, Medical And EV Applications Analyst Says Post Q4

Benchmark analyst Mark Miller maintained IPG Photonics Corp IPGP with a Buy and raised the price target from $130 to $140.
IPG's Q4 sales and adjusted earnings of $1.08 per diluted share were upsides to investor expectations.
IPG posted charges and adjustments related to long-lived assets in Russia, an asset divestiture, and a foreign exchange gain.
China and Germany's sales were down double digits sequentially and Y/Y, but North American and Japanese sales were up sequentially.
Revenue declined in China due to lower demand in cutting and marking applications, partially offset by growth in welding and cleaning applications. Currency translations and COVID-related restrictions also negatively impacted revenue in China.
Sales decreased slightly in North America year-over-year, as growth in cutting, welding, and medical applications was offset by lower sales in non-laser systems, advanced applications, and the divestiture of the telecom business.
High-power laser sales fell by a double-digit percent sequentially and Y/Y, while pulsed, QCW, other lasers, and other product sales were up sequentially. The decline was due to softer demand in cutting, partially offset by growth in welding applications.
IPG ended 2022 with a record backlog of $811 million.
Once again, demand was strong for medical and EV applications.
A recovery in China combined with growth in EV and medical sales, and recently introduced products are seen driving 23% Y/Y bottom line growth to an EPS of $6.38 in 2024.
Price Action: IPGP shares traded higher by 1.55% at $127.49 on the last check Wednesday.

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