EnPro Industries' Effective Cost Management And Growth Strategy Builds Momentum For 2024: KeyBanc

KeyBanc analyst Jeffrey D. Hammond reiterated an Overweight rating on the shares of EnPro Industries Inc NPO, raising the price target to $145 from $135.

The analyst notes that NPO has been managing costs effectively, particularly in the AST segment, without jeopardizing its ability to bounce back.

The company will also leverage growth on new wins (new products, new customers, vertical integration plays), which builds a robust setup for 2024.

With direct exposure to the semiconductors industry (NPO AST segment ~40% of sales), the analyst expects EnPro to gain from as semiconductor/electronics inflection point becoming increasingly apparent in 2H23.

Hammond believes if investors can look past the near-term semi-trepidation in the broader market, NPO will benefit from solid earnings momentum set to build meaningfully in 2024.

Idiosyncratic from the semiconductor markets, the analyst adds that NPO has received very little credit for meaningfully reshaping the portfolio over the last two years.

The company has bolstered growth with higher returns, greater earnings power, and less cyclicality, Hammond adds.

Thus, valuations will continue to re-rate higher if investors better appreciate this company, mentioned the analyst.

Price Action: NPO shares are trading higher by 0.43% to $127.16 on the last check Thursday.