12 Best Industrial Stocks to Buy for the Rest of 2022
The pros love several value-oriented sectors for 2022, including industrials. Read on as we highlight 12 top industrial stocks for the remainder of the year.
The industrial sector entered 2022 the same way they entered 2021: generally favored by analysts anticipating growth from a healing economy. But, like so many other corners of the market, numerous names within the sector – including many of the best industrial stocks – were hit hard.
But even amid stiff broad-market headwinds, industrial stocks have shown some resilience. For the year-to-date, the Industrial Select Sector SPDR Fund (XLI) is "only" down around 17% compared to the S&P 500's more than 20% decline.
Plus, valuations for some of the best industrial stocks for 2022 are much more attractive than they were in 2021. Indeed, the industrials sector is trading at 17 times forward earnings compared to a more than 25 times forward price-to-earnings (P/E) ratio seen last year, per Yardeni Research.
And industrial stocks stand a fighting chance for the remainder of this year, despite growth concerns related to China's months-long COVID-19-related lockdowns and the Fed's rate-hiking cycle. In May, for instance, the Institute of Supply Management's manufacturing Purchasing Manager Index was up 0.7 percentage point from April, marking a 24th straight month of economic growth.
Plus, the travel industry is poised for a red-hot summer, with consumers ready to travel again amid pent-up demand for vacation. This is certainly good news for many industrial stocks.
"If GDP continues to expand as we expect in 2022 (short-term setbacks notwithstanding) and interest rates inch higher," say Janus Henderson Investors strategists, "value-oriented sectors such as financials, industrials, materials and energy might once again take the lead."
However, given that 2022's economy will not be as vibrant as 2021's, it'll pay to be choosy. With that in mind, read on to explore our 12 best industrial stocks to buy for the remainder of 2022, including what sets these shares apart from the rest of the sector pack.
Data is as of June 13. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Analyst ratings and estimates are courtesy of S&P Global Market Intelligence. Stocks are listed by analysts' consensus recommendation, from lowest to highest.
Owens Corning
- Market value: $8.7 billion
- Dividend yield: 1.7%
- Analysts' ratings: 8 Strong Buy, 1 Buy, 11 Hold, 1 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 2.24 (Buy)
Owens Corning (OC, $82.81) is a global building and construction materials leader producing glass fiber used in composites, insulation and roofing materials. OC sees strong demand for its products across its business segments continuing in 2022, despite rising inflationary pressures.
Even with higher inflation, the Toledo, Ohio-based company expects to maintain positive price/cost in each of its three businesses: composites, insulation and roofing. Moving forward, it will continue to closely manage the ongoing impacts of inflation, supply-chain disruptions and the regional impacts of COVID-19 on its businesses.
There are several economic factors mpacting the businesses of one of Wall Street's best industrial stocks. Among them are residential repair and remodeling, U.S. housing starts, global commercial construction activity and global industrial production.
Owens Corning's strategy to accelerate growth and generate higher and more resilient earnings is by strengthening its core businesses and expanding into new products and applications. This will be done by utilizing its market knowledge, material science expertise and manufacturing capabilities.
"Owens Corning could face an air pocket in housing in late 2022/early 2023, off a higher base in demand, we see prices holding in 2023 and believe the company is now better positioned to navigate the volatility,'' Jefferies analysts (Buy) write in a note.
After OC reported record first-quarter revenue, UBS Global Research analyst John Lovallo raised his 2022 through 2024 earnings estimates for the company. He also lifted his price target and reiterated a Buy rating on the stock.
"We believe the company will continue to execute and generate more than $1 billion of free cash flow [the money left over after a company has covered the capital expenditures needed to grow its business] annually over our forecast period, which can be allocated towards strategic growth and return of capital to shareholders," Lovallo wrote in a note.
Atlas Air Worldwide Holdings
- Market value: $1.8 billion
- Dividend yield: N/A
- Analysts' ratings: 3 Strong Buy, 1 Buy, 1 Hold, 0 Sell, 1 Strong Sell
- Analysts' consensus recommendation: 2.17 (Buy)
Atlas Air Worldwide Holdings (AAWW, $63.99) is on this list of the best industrial stocks because it is projected to climb through the remainder of 2022 and beyond. A significant lift in its global air freight business coming from new high-yield long-term contracts – some of which run through 2027.
To handle the rise, the Purchase, New York-based provider of aircraft and aviation operating services is adding eight new aircraft to its fleet. As a result, Atlas expects fiscal 2022 revenue of approximately $4.6 billion and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of about $1 billion. AAWW's full-year earnings outlook reflects the major portion of its business coming from high-yield long-term contracts and the ad-hoc charter market.
Atlas Air operates three segments: ACMI, charter and dry leasing. Its ACMI segment provides aircraft, crew, maintenance and insurance services; charter comprises planeload air cargo and passenger aircraft charters including the U.S. military, direct shippers and freight forwarders. Dry leasing consists of the leasing of aircraft and engines.
While Atlas' global airfreight capacity continues to be constrained by the limited number of new freighters entering the market, it is still above pre-pandemic levels.
The extremely tight aviation market has pushed contract durations out and rates up, says Stifel analyst Frank Galanti (Buy). AAWW's air freight rates are 2.5 times higher than average, which should allow the company to generate roughly 20% free cash flow yields excluding growth capital expenditures through 2023.
"Based on a still strong air cargo market, a significantly improved balance sheet, and a valuation discount to mid-cycle valuations, we believe there is still room on the upside for [AAWW] shares at today's prices," Galanti says, adding "Atlas Air shares are getting awfully close to a 'Pound The Table' Buy."
AGCO
- Market value: $8.3 billion
- Dividend yield: 0.8%
- Analysts' ratings: 6 Strong Buy, 5 Buy, 7 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 2.06 (Buy)
AGCO (AGCO, $110.89) – a manufacturer and distributor of agriculture equipment - expects sales of its tractors, combines, seeding and tillage equipment and their replacement parts to deliver impressive yields through 2022 from a backlog in orders. This is a result of global disruptions in the supply chain.
Supply-chain constraints held back U.S. retail sales of small tractors from the Duluth, Georgia-based manufacturer in the first three months of 2022, compared to the record highs during the same period in 2021.
In North America, higher commodity prices and healthy sentiment among farmers are projected to be a boon for 2022 sales. And weaker demand for smaller equipment following several years of solid growth will likely be offset by increased demand to replace an aged fleet of larger equipment. AGCO expects North American Industry unit sales to be up 5% to 10% this year compared to 2021.
AGCO's results are heavily dependent on its supply-chain performance of 2022, (i.e. current estimates of component deliveries in 2022,) and could be impacted if the actual supply-chain delivery performance differs from the estimates, said Andy Beck, chief financial officer at AGCO, on a recent earnings call with investors.
"We're facing supplier bottlenecks and delays in all regions and expect significant challenges in the quarters ahead as we work to meet expected increases in end market demand," Eric Hansotia, CEO of AGCO, said on that same call. "The volatile supply-chain environment is still requiring us to keep higher than normal levels of raw material and work in progress inventory on hand."
For all of 2022, AGCO expects its raw material and work-in-process inventory to remain elevated, which will help the company manage through the difficult supply-chain environment. It projects production hours to increase between 5% and 10% in 2022 compared to 2021 production levels.
Oppenheimer analyst Kristen Owen (Outperform) is encouraged that end-user demand for AGCO remains strong, while extended order boards provide runway into 2023. What's more, improving global agriculture market fundamentals support +13% revenue growth in 2022 and low-single-digit growth in 2023.
"We believe AGCO is well positioned to benefit from secular trends of digitization, automation and autonomy unfolding in agriculture," Owens says. "Given a focus on creating value for the producer, we believe AGCO is effectively leveraging its technology investments to create a steady stream of incremental value through OE integration and aftermarket capture and driving improved cross-cycle margins."
TrueBlue
- Market value: $638.1 million
- Dividend yield: N/A
- Analysts' ratings: 2 Strong Buy, 0 Buy, 2 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 2.00 (Buy)
TrueBlue (TBI, $19.18) is riding the wave from businesses searching for workers as constraints in the supply chain ease, generating whitecaps for the staffing firm in the second half of 2022 and beyond.
The Tacoma, Washington-based company is the largest provider of blue-collar, contingent on-demand and skilled laborers in the U.S. It connects clients with staffing solutions across numerous industries, including manufacturing, construction and hospitality.
Construction and manufacturing have yet to make a full recovery due to supply-chain constraints. Alternative energy projects continue to be delayed too, which could be material for TBI for several years.
"Coming off a record level of new wins last year, PeopleManagement has secured annualized new business wins of $21 million this year, up more than 40% versus the three-year comparable average prior to 2021," said Patrick Beharelle, CEO of TrueBlue, in the company's recent earnings call.
PeopleManagement, offers contingent, on-site industrial staffing and commercial driver services and is one of TrueBlue's three business segments. As for the other two: PeopleReady provides on-demand industrial staffing and PeopleScout delivers recruitment process outsourcing (RPO) and managed service provider solutions for numerous industries.
Baird analyst Mark Marcon believes TBI is one of the best industrial stocks because the recovery in construction, manufacturing and alternative energy will provide TrueBlue with upside in the second half of 2022 and in 2023.
Marcon has an Outperform rating on TBI. While " management continues to take steps to structurally improve profitability through JobStack and centralization efforts that could yield material savings in 2023 and beyond," the analyst also thinks TBI is attractively valued at current levels. Indeed, the stock is currently trading at just 8 times analysts' fiscal 2022 earnings estimate.
United Rentals
- Market value: $19.0 billion
- Dividend yield: N/A
- Analysts' ratings: 10 Strong Buy, 1 Buy, 8 Hold, 1 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 2.00 (Buy)
United Rentals' (URI, $265.06) aerial lifts, used in the construction of bridges, are just one of the heavy-duty pieces of machinery it can engage to shore up its pillars for growth.
Headquartered in Stamford, Connecticut, United Rentals is the largest rental equipment company in the world, with some 4,300 classes of equipment, including general construction and industrial equipment, aerial work platforms, and pumps for agribusiness, construction and mining.
As is typical of the seasonality for the industrial equipment rental business, United Rentals saw its revenues from rentals decline in the first quarter of 2022 from the fourth quarter 2021; but by only half as much as it normally is.
Having brought in more fleet at the end of 2021, the additional capacity helped United Rentals capitalize on a surge in demand. As a result, URI's fleet productivity increased 13% during Q1 2022 compared to the same quarter a year ago.
"We see runway here,'' Matt Flannery, CEO of United Rentals, told investors during a recent earnings call. "And, there's a future tailwind emerging from the infrastructure legislation."
United Rentals has entered into discussions with some of its construction and industrial customers regarding work related to federal projects, i.e. roads, bridges and ports that should kick-off in 2023. These are tied to the $1.2 trillion Infrastructure Investment and Jobs Act that passed in November.
In early May, Argus Research analyst John Eade raised his adjusted 2022 earnings per share (EPS) estimate for United Rentals by 24% to $27.30 from $26.20 based on recent trends in sales, margins and fleet productivity. Eade expects URI's growth to continue in 2023 and boosted his preliminary adjusted earnings per share forecast to $31.30 from $30.00.
"On the fundamentals, United Rentals shares trade at 10-times our 2023 earnings per share estimate," Eade wrote in a note. He has a Buy rating on the industrial stock and says the "recent share price weakness offers a buying opportunity." URI is down 20% for the year-to-date.
Southwest Airlines
- Market value: $23.8 billion
- Dividend yield: N/A
- Analysts' ratings: 9 Strong Buy, 6 Buy, 6 Hold, 1 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.95 (Buy)
Southwest Airlines (LUV, $37.62) has mapped a flight plan to return the carrier to profitability in 2022, lifted by its hedges against fuel spikes and accelerated by rising fares and passenger bookings.
The surge in passenger demand helped the Dallas, Texas-based low-fare, low-cost airline's revenues takeoff late in the first quarter of 2022. And this occurred despite elevated cancellations and staffing issues in January and February due to the omicron variant of COVID-19 and higher jet fuel prices.
Southwest's hedge is expected to shave an estimated 61 cents from its jet fuel costs during the second quarter, which are projected to soar to $3.15 per gallon by July, up from $2.30 a gallon in the first quarter; a savings of more than $290 million over that three-month period alone.
"We will have another meaningful hedge gain in Q2, and we remain well protected with our fuel hedge portfolio in the second half of this year," Bob Jordan, CEO of Southwest Airlines, told investors during the company's first-quarter earnings call.
Southwest projects its fair market value for fuel hedge savings in 2022 is approximately $1 billion and is based on a snapshot of its fuel guidance. This is especially true during a time when market oil prices are "moving pretty materially on a daily basis," Tammy Romo, chief financial officer of Southwest Airlines, said on that call.
Argus Research analyst John Staszak (Buy) thinks earnings in the airline industry tend to be highly cyclical and volatile, reflecting changes in the cost of jet fuel and in overall capacity. Still, "we think that Southwest is among the best low-cost carriers, with a clean balance sheet, a strong management team, and low costs and fares."
Staszak adds that Southwest is "well-positioned to emerge from the coronavirus pandemic" thanks to its $16.7 billion in liquidity and "an emphasis on leisure travelers."
Knight-Swift Transportation Holdings
- Market value: $7.4 billion
- Dividend yield: 1.1%
- Analysts' ratings: 11 Strong Buy, 3 Buy, 4 Hold, 1 Sell, 1 Strong Sell
- Analysts' consensus recommendation: 1.90 (Buy)
Knight-Swift Transportation Holdings (KNX, $45.22) turns to broker drivers to help address the supply-chain bottlenecks shippers are experiencing and accelerate its revenues down the road in 2022.
The Phoenix, Arizona-based truckload carrier, one of the largest in the nation with over 71,000 trailers in its fleet, is leveraging its fleet to help reduce supply-chain issues regardless who is behind the wheel.
With its expansive trailer network, Knight-Swift Transportation affords smaller and third-party carrier drivers' the opportunity to partake in "drop-and-hook" trucking, a practice they historically have not been able to. This, in turn, delivers KNX additional revenue.
Drop-and-hook trucking, aka power-only, permits third-party carriers to haul freight using Knight-Swift trailers. This has been beneficial to shippers during the tight truckload market. Shippers have benefitted from the added capacity afforded Knight-Swift trailers that the smaller carriers could not accommodate in the past.
Knight-Swift's power-only service grew more than 400% in the past year and helped fuel 142% year-over-year revenue growth in its logistics business segment in Q1.
"This has been hugely successful with more customers and small carrier demand than we can keep up with,'' said David Jackson, CEO of Knight-Swift Transportation Holdings, during a recent analyst call.
Knight-Swift Transportation's traction in this business shows how they effectively leverage their scale in truckload to drive growth in related businesses, UBS Global Research analyst Thomas Wadewitz (Buy) says. "KNX is leveraging their services and large trailer network to attract small carriers and drive growth," the analyst adds.
Wadewitz anticipates additional upside in KNX's power-only loads and expects that backdrop to translate into solid earnings performance throughout 2022, with the next question being how 2023 and beyond will shape up.
KNX is also one of the best industrial stocks in terms of its balance sheet. The company has roughly "$2.5 billion in buying power and significant potential to grow through acquisition," Wadewitz says.
"We believe that KNX has an attractive mix of growth drivers as they lever their large scale in truckload to support growth in related segments and as they use their large free cash flow and balance sheet capacity to deliver inorganic growth," the analyst adds.
Hub Group
- Market value: $2.5 billion
- Dividend yield: N/A
- Analysts' ratings: 9 Strong Buy, 1 Buy, 7 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.88 (Buy)
What makes Hub Group (HUBG, $71.68) one of the best industrial stocks for the rest of 2022 and beyond? The company is leveraging both the roads and rails to transport freight, fueling an increase in customers that is expected to drive revenues through 2025.
The Oak Brook, Illinois-based provider of multi-modal transportation services throughout North America utilizes company-operated and third-party-owned equipment to store and transport customers goods.
Shortages caused by disruptions in the supply chain along with recent fuel price hikes have driven more customer volume to intermodal (two or more modes of transportation to deliver goods) from just trucks. Intermodal makes up more than half of Hub's revenue, and creates better economics and environmental benefits than strictly trucking transportation.
"Our value proposition and supply-chain savings is resonating with our customers and leading to a strong pipeline of wins we will continue to see throughout the remainder of the year," said Phil Yeager, chief operating officer of Hub Group, in the company's first-quarter earnings call.
Hub Group's bullish outlook for 2022 prompted it to upwardly revise its guidance, citing further demand from its customers, strong macro trends, growth in consumer spending and low inventory levels. It expects supply-chain conditions to continue to be constrained and Hub's yield management and operational efficiencies will lead to additional growth in earnings.
For 2022, Hub expects diluted EPS between $9 and $10 and revenue of $5.4 billion at the midpoint, versus prior guidance for earnings of $5.90 to $6.30 per share and revenue of $5.0 billion at the midpoint. This will put the company on track for revenue to grow to between $5.5 billion and $6.5 billion by 2025.
Stifel analysts (Buy) said that management's new guidance reflects "the long-term viability of intermodal in the shipper freight spend stack, regardless of cycle, but especially as network fluidity improves and supply chains find some semblance of normalcy."
They believe HUBG's growth profile looks attractive for the next couple of years, even with shares currently trading well into the value territory.
"The flagship intermodal offering is especially well-positioned given the increased foci on the rising price of fuel and structural limitations on trailer supply, which is driving faster conversion to rail," Stifel's analysts wrote.
Stifel updated its estimates to reflect the significant step up in results and guidance, with 2022 and 2023 earnings per share increasing from $4.85 and $5.26 to $9.40 and $7.95 respectively.
UFP Industries
- Market value: $4.4 billion
- Dividend yield: 1.4%
- Analysts' ratings: 4 Strong Buy, 0 Buy, 2 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.67 (Buy)
UFP Industries (UFPI, $70.46) is prioritizing enhanced production capacity as well as new and value-added lumber, decking and interior design products for its future growth.
The Grand Rapids, Michigan-based manufacturer supplies tens of thousands of wood, plastic and lumber building products to the construction, industrial and retail markets.
A leading supplier of pressure-treated lumber, UFP produces materials to help customers solve their building challenges. This creates competitive advantages from its new product offerings.
In the first quarter, new product sales for UFP were $151 million, well ahead of the pace necessary to hit the company's 2022 goal of $525 million, Matt Missad, CEO of UFP Industries, said during a conference call with analysts.
In the second quarter of 2022, UFPI is slated to add a new ProWood fire retardant location that will increase its national capacity to 45 million board feet.
"The new fire assembly is expected to generate strong customer interest in the back half of 2022," Missad said. And UFP's new Ultra Aluminum product line from its Deckorators Composite Decking business is doing well, he added.
After a recent survey of decking dealers in North America, Stifel analysts said inventories appear to be approaching normalization resulting in less restocking benefits for manufacturers in 2022. Still, overall trends for UFPI and its fellow industrial stocks in the composite decking space remain strong, and they expect price and cost pressures to improve through the remainder of the year.
"Overall, we remain positive on the space and the conversion opportunity for composite decks and market outgrowth in the outdoor living category," the analysts write in a note. They have a Buy rating on UFPI.
Chart Industries
- Market value: $6.5 billion
- Dividend yield: N/A
- Analysts' ratings: 13 Strong Buy, 3 Buy, 3 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.47 (Strong Buy)
Chart Industries' (GTLS, $163.27) is the first of the Strong Buy-rated industrial stocks on this list – and it's easy to see why. The company expects earnings to double in 2022, fueled by the fast-growing liquified natural gas and hydrogen industries that could provide investors with a long runway of growth.
The Atlanta, Georgia-based liquified natural gas (LNG) equipment-maker and industrial gas technology company is expected to experience high single-digit to low double-digit growth for the next decade supplying the rapidly growing LNG and hydrogen industries.
This year, Chart has seen an increase in both orders and queries from the public and private sectors requiring its products, including the U.K., which has doubled its hydrogen target by 2030. Later this year, a final investment decision is expected from privately held energy development firm Greenstone Renewables that would make GTLS the exclusive technology and equipment supplier of its 100% renewable solar hydrogen production project.
Energy independence, resiliency, security and sustainability were key drivers of record orders ($636.8 million) and backlog ($1.5 billion) reported in the first quarter of 2022, accelerated by activity in both LNG and specialty products.
For the full fiscal year, Chart revenue is projected to be between $1.725 billion and $1.85 billion and adjusted earnings per share between $5.35 and $6.50 – solid improvements over the $1.3 billion in revenue and $2.84 per share in earnings the company reported in 2021.
Stifel analyst Benjamin Nolan (Buy) is targeting even more growth for Chart. "We expect earnings per share should double next year and be over $10 a share in 2024 and never look back," he says.
Chart could grow organic revenue at a 20% compound annual growth rate through the end of the decade, he adds. If that were to occur, investors should expect a sharp appreciation in GTLS shares.
XPO Logistics
- Market value: $5.3 billion
- Dividend yield: N/A
- Analysts' ratings: 15 Strong Buy, 5 Buy, 2 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.41 (Strong Buy)
XPO Logistics (XPO, $46.01) is shedding some of its load as it shifts its diversified transportation business model to a less-than-truckload (LTL) carrier. This will allow it to capitalize on the growth in e-commerce.
The Greenwich, Connecticut-based provider of supply-chain solutions including LTL and brokerage (a network of vetted carriers) recently sold its North American intermodal business (rail brokerage and drayage services) and plans to divest its European business by 2023 to accelerate growth.
The company also plans to separate its tech-enabled brokered transportation services from its LTL business in North America. When complete – likely in the fourth quarter of this year – XPO is expected to be the third-largest U.S. provider of domestic and cross-border LTL freight shipping, with a competitive network of transportation assets managed by its proprietary technology.
"We believe that by separating these businesses, we can significantly enhance value creation for our customers, employees and shareholders," said Brad Jacobs, CEO of XPO Logistics, in the March press release announcing the spinoff. "Our two core businesses of North American less-than-truckload and tech-enabled truck brokerage are industry-leading platforms in their own right, each with a distinct operating model and a high return on invested capital," he added.
XPO revised its 2022 EBITDA targets based on stronger than anticipated first-quarter results and the sale of its intermodal business. The company is now targeting 2022 adjusted EBITDA of $1.35 billion to $1.39 billion, with $360 million-$370 million in Q2. For the full year 2022, the adjusted EBITDA target for its North American LTL division is at least $1 billion.
BofA Securities analyst Ken Hoexter (Buy) believes XPO is an industry growth leader in brokerage led by its XPO Connect and is focused on core improvement at its LTL segment.
"XPO is shifting to a pure play LTL carrier," Hoexter says. "Given the benefits to LTL from e-commerce growth, and XPO's focus to improve ops, it should unleash trapped value."
Griffon
- Market value: $1.7 billion
- Dividend yield: 1.2%
- Analysts' ratings: 4 Strong Buy, 1 Buy, 0 Hold, 0 Sell, 0 Strong Sell
- Analysts' consensus recommendation: 1.20 (Strong Buy)
Griffon (GFF, $29.63) is making moves to ensure that it remains one of the best industrial stocks for investors. Following the 2018 divestiture of its plastics business, the company in April said it will sell Telephonics, its defense electronics division, to TTM Technologies (TTMI) for $330 million in cash.
This is part of a broader strategic review the New York-based manufacturer of Clopay garage doors is undergoing in order to focus on its consumer and professional products' (CPP) segment and unlock shareholder value.
GFF has also made its fair share of acquisitions over the years, including the 2017 purchase of ClosetMaid and 2019 pickup of CornellCookson. Most recently, the company acquired Hunter Fan earlier this year, which contributed 21% to revenue in Griffon's consumer and personal products segment in its March quarter.
For all of 2022, Griffon expects revenue of $2.85 billion and segment adjusted EBITDA OF $475 million – higher than the $2.75 billion and $355 million it forecast in February due to contributions from Hunter.
While Griffon's CPP business accounts for 45% of its revenues, its home and building products (HBP) division makes up about 40% of total sales. Raymond James analyst Sam Darkatsh called the performance of HPB in the March quarter "staggering and unexpected," with +50% organic sales growth and 328% EBITDA margins.
"Price-cost has finally hit parity in Griffon's highest margin HBP business, backlogs continue to widen, and upside remains if/when CPP can also reach price-cost parity," the analyst writes in a note.
Darkatsh has a Strong Buy rating on the small-cap stock with a $40 price target, implying expected upside of 48% from current levels.
