Vertiv Faces Spending Pullback, Supply Woes & Potential Asia-Pacific Slowdown, Says Analyst

Mizuho analyst Brett Linzey reiterated a Neutral rating on the shares of Vertiv Holdings Co VRT with a price target of $10.00.
The company had announced that its CEO Rob Johnson, will be stepping down due to health reasons effective December 31, 2022.
His successor Giordano Albertazzi, the analyst says, will be focused on continuing to execute the current strategies in place.
Linzey said Vertiv, though reaffirmed its Q3 guidance, expected results to be at the lower end of the range primarily from FX headwinds.
Though its FY23 operating profit guidance of $730 million - $750 million, the analyst thinks, is plausible, with price finally catching up and operational issues getting ironed out, this creates a high bar heading into next year amid a slowing global backdrop.
Linzey lists pullback in hyperscale data center spending, sharper slowdown in the Asia Pacific, which is 25% of the portfolio, and lingering supply challenges that limit the ability to serve the customer and convert orders as potential risks.
Lower business confidence could also support reduced capital expenditure activity, and product deficiencies that flare up could impede the ability to compete on new products, added the analyst.
Price Action: VRT shares are trading higher by 5.64% at $11.89 on the last check Tuesday.

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