Atkore Is A 'Highly Compelling' Electrification Opportunity, Says Bullish Analyst

Shares of Atkore Inc ATKRwere climbing in early trading on Wednesday.

With more than 90% of total sales generated from Electrical Infrastructure, the stock represents "a highly compelling opportunity within Electrification," according to KeyBanc Capital Markets.

The Atkore Analyst: Jeffrey Hammond initiated coverage of Atkore with an Overweight rating and price target of $175.

The Atkore Thesis: The stock is currently trading at a significant discount to peers, despite the company's strong growth and returns, Hammond said in the initiation note.

Check out other analyst stock ratings.

Atkore has generated more than 17% CAGR (compounded annual growth rate) from fiscal 2020 to 2024E, versus around 5% growth by peers, he added.

"Although we acknowledge recent sales/margin growth has mostly been on price and price/cost normalization remains an overhang on shares, we nonetheless feel ATKR's shares should trade more in line with its Electrical peers," the analyst wrote.

"Given the price/cost benefits in FY21-FY22 enabled ATKR to generate impressive FCF, we note the Company has made meaningful structural improvements to the EPS profile (we estimate >$5/sh.) through M&A and share repurchases, with additional benefits from organic investment," he further stated.

ATKR Price Action: Shares of Atkore had risen by 3.12% to $133.92 at the time of publication on Wednesday.

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