Applied Industrial Technologies price target raised to $325 from $275 at KeyBanc

KeyBanc raised the firm’s price target on Applied Industrial Technologies (AIT) to $325 from $275 and keeps an Overweight rating on the shares following its recently announced Hydradyne acquisition. The firm thinks Applied Industrial Technologies has the most balance sheet capacity within its coverage list to support shareholder-friendly capital allocation via M&A and share repurchases. KeyBanc further believes the company’s propensity for bolt-on M&A will continue to lean toward its Engineered Solutions segment, with most targets likely centered around Discrete Automation end markets. The firm thinks a continuation of that strategy should support stronger mix through the coming years, and believes the ultimate ceiling for long-term EBITDA margins could be in the mid- to high teens.